Long-Run Stock Performance of German Initial Public Offerings: Survey and Update

2010 ◽  
Author(s):  
Oksana Pryshchepa ◽  
Richard Stehle
Keyword(s):  
Initial Public Offerings ◽  
Stock Performance ◽  
Public Offerings ◽  
Long Run

The Rationale for IPO Lockup Agreements: Agency or Signaling?

2012 ◽  
Vol 15 (03) ◽  
pp. 1250013 ◽  
Author(s):  
Fei Gao ◽  
Mazhar A. Siddiqi
Keyword(s):  
Information Asymmetry ◽  
Initial Public Offerings ◽  
Agency Costs ◽  
Control Agency ◽  
Public Offerings ◽  
Long Run ◽  
Lockup Period

Most Initial Public Offerings (IPOs) feature share lockup agreements, which prohibit insiders and other pre-IPO shareholders from selling their shares for a specified period of time following IPO. We explore possible reasons why some IPO firms voluntarily agree to have a much longer lockup period than other firms. We find evidence that lockup agreements are used to control agency costs. Longer lockups are significantly related to inferior long-run returns and this relationship is stronger for firms that have less reputable underwriters. We find no evidence that lockup agreements are used to signal firm quality and we are unable to relate firm quality, as measured by long-run returns, to information asymmetry variables.

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