Insider Selling and IPO Price Premium

Chunhua Chen, Tianze Li, Yingqi Li and Steven Xiaofan Zheng

Emerging Markets Finance and Trade, 2018, vol. 54, issue 15, 3500-3518

Abstract: We examine insider selling for initial public offering (IPO) firms using a sample of 1868 IPOs between 1988 and 2012. We find that overvalued IPOs have higher probability of offering secondary shares, higher proportion of secondary shares offered, and more upward revision in the total number of shares offered. They also have higher probability of insider sale in the open market both before and after lockup expiration. The size of insider sale in the open market also increases with the degree of overvaluation. The results are consistent with the hypothesis that IPO insiders try to sell their shares opportunistically into overvalued markets.

Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2018.1435416 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:54:y:2018:i:15:p:3500-3518

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2018.1435416

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().