Attentive insider trading

Dallin M. Alldredge and David C. Cicero

Journal of Financial Economics, 2015, vol. 115, issue 1, 84-101

Abstract: We provide evidence that some profitable insider stock selling is motivated by public information. At firms that disclose having concentrated sales relationships, insiders appear to sell their own stock profitably based on public information about their principal customers. Supplier insiders also sell more stock when public information about their customers׳ recent returns and earnings surprises suggests they will earn larger profits. These results are stronger when outside investor attention could be lower. Outside of this setting, insiders engage in a higher proportion of routine sales and their sales are less profitable. We do not find similar patterns for insider purchases.

Keywords: Insider trading; Investor attention; Supply chain (search for similar items in EconPapers)
JEL-codes: G14 G30 K22 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:115:y:2015:i:1:p:84-101

DOI: 10.1016/j.jfineco.2014.09.005

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