This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Shareholder lock-in contracts : share price and trading volume effects at the lock-in expiry

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Angenendt, Peter-Paul
Goergen, Marc
Renneboog, L.D.R. (Tilburg University, Center for Economic Research)

Additional information is available for the following registered author(s):

Abstract

This paper unveils the diversity in lock-in agreements of firms listed on the Nouveau Marche stock exchange in France. We give the main economic reasons why shareholders adopt lock-in agreements that are more stringent than legally required. We relate the abnormal returns and the abnormal volume at the expiry dates of the different types of lock-in contracts to the degree of underpricing, venture-capitalist reputation and underwriter reputation. Abnormal returns and trading volume increase at the lock-in expiry; this is especially pronounced at the expiry dates of insider lock-in contracts as insiders are legally required to be locked-in. We do not find significant abnormal returns at the expiries of VC contracts, even though trading volume increases at their lock-in expiry. There is also no evidence of a positive (negative) relation between abnormal returns (abnormal volume) and more stringent lock-in contracts. Lock-in contracts and the degree of underpricing are complementary signalling devices.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://arno.uvt.nl/show.cgi?fid=53847
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 115.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length:
Date of creation: 2005
Date of revision:
Handle: RePEc:dgr:kubcen:2005115

Contact details of provider:
Web page: http://center.uvt.nl

For technical questions regarding this item, or to correct its listing, contact: (Corry Stuyts).

Related research
Keywords: lock-in agreements lock-up contracts lock-in expiry lock-up expiry signaling underwriter reputation underpricing

Other versions of this item:

Find related papers by JEL classification:
G30 - Financial Economics - - Corporate Finance and Governance - - - General
G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Dherment-Ferere, I. & Renneboog, L.D.R., 2000. "Share price reactions to ceo resignations and large shareholder monitoring in listed French companies," Discussion Paper 70, Tilburg University, Center for Economic Research. [Downloadable!]
  2. Blume, Marshall E, 1975. "Betas and Their Regression Tendencies," Journal of Finance, American Finance Association, vol. 30(3), pages 785-95, June. [Downloadable!] (restricted)
  3. Goergen, Marc & Renneboog, Luc & Khurshed, Arif, 2006. "Explaining the diversity in shareholder lockup agreements," Journal of Financial Intermediation, Elsevier, vol. 15(2), pages 254-280, April. [Downloadable!] (restricted)
  4. Eric Nowak & Alexandra Gropp, 2000. "Ist der Ablauf der Lock-up-Frist bei Neuemissionen ein kursrelevantes Ereignis," Working Paper Series: Finance and Accounting 63, Department of Finance, Goethe University Frankfurt am Main. [Downloadable!]
  5. Laura Bottazzi & Marco Da Rin, 2002. "Venture capital in Europe and the financing of innovative companies," Economic Policy, CEPR, CES, MSH, vol. 17(34), pages 229-270, 04. [Downloadable!] (restricted)
  6. Laura Casares Field, 2001. "The Expiration of IPO Share Lockups," Journal of Finance, American Finance Association, vol. 56(2), pages 471-500, 04. [Downloadable!] (restricted)
  7. Alon Brav & Paul A. Gompers, 2003. "The Role of Lockups in Initial Public Offerings," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 16(1), pages 1-29.
  8. Bharat A. Jain & Omesh Kini, 2000. "Does the Presence of Venture Capitalists Improve the Survival Profile of IPO Firms?," Journal of Business Finance & Accounting, Blackwell Publishing, vol. 27(9&10), pages 1139-1183. [Downloadable!] (restricted)
  9. Francesca Cornelli, 2001. "Bookbuilding and Strategic Allocation," Journal of Finance, American Finance Association, vol. 56(6), pages 2337-2369, December. [Downloadable!] (restricted)
  10. Leland, Hayne E & Pyle, David H, 1977. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Journal of Finance, American Finance Association, vol. 32(2), pages 371-87, May. [Downloadable!] (restricted)
    Other versions:
  11. Eli Ofek & Matthew Richardson, 2003. "DotCom Mania: The Rise and Fall of Internet Stock Prices," Journal of Finance, American Finance Association, vol. 58(3), pages 1113-1138, 06. [Downloadable!] (restricted)
  12. Espenlaub, S. & Goergen, M. & Khurshed, A. & Renneboog, L.D.R., 2002. "Lock-in agreements in venture capital backed UK IPOS," Discussion Paper 46, Tilburg University, Center for Economic Research. [Downloadable!]
  13. Goergen, M. & Khurshed, A. & McCahery, J.A. & Renneboog, L.D.R., 2002. "The rise and fall of the European new markets : on the short and long-run performance of high-tech initial public offerings," Discussion Paper 101, Tilburg University, Center for Economic Research. [Downloadable!]
  14. Dimson, Elroy, 1979. "Risk measurement when shares are subject to infrequent trading," Journal of Financial Economics, Elsevier, vol. 7(2), pages 197-226, June. [Downloadable!] (restricted)
  15. Barber, Brad M. & Lyon, John D., 1997. "Detecting long-run abnormal stock returns: The empirical power and specification of test statistics," Journal of Financial Economics, Elsevier, vol. 43(3), pages 341-372, March. [Downloadable!] (restricted)
  16. Eli Ofek & Matthew Richardson, 2000. "The IPO Lock-Up Period: Implications for Market Efficiency And Downward Sloping Demand Curves," New York University, Leonard N. Stern School Finance Department Working Paper Seires 99-054, New York University, Leonard N. Stern School of Business-. [Downloadable!]
Full references

Statistics
Access and download statistics

Did you know? Authors can create their own profile with links to their works on the RePEc Author Service.

This page was last updated on 2008-7-29.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.