Lockup expiration, insider selling and bid-ask spreads.

Contrary to our expectation that lockup expiration should result in an exacerbation of the information asymmetry problem faced by market makers, we find an improvement in secondary market liquidity in the post-expiration period. For the subset of firms with reported insider sales during the 10-day p...

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Main Authors:	Chandrasekhar Krishnamurti., Peh, Hwee Hwee.
Other Authors:	Nanyang Business School
Format:	Research Report
Published:	2008
Subjects:	DRNTU::Business::Marketing
Online Access:	http://hdl.handle.net/10356/7035
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Institution:	Nanyang Technological University

id	sg-ntu-dr.10356-7035
record_format	dspace
spelling	sg-ntu-dr.10356-70352023-05-19T07:31:18Z Lockup expiration, insider selling and bid-ask spreads. Chandrasekhar Krishnamurti. Peh, Hwee Hwee. Nanyang Business School DRNTU::Business::Marketing Contrary to our expectation that lockup expiration should result in an exacerbation of the information asymmetry problem faced by market makers, we find an improvement in secondary market liquidity in the post-expiration period. For the subset of firms with reported insider sales during the 10-day post lockup expiration period, bid-ask spreads reduce by a larger percentage - mainly due to a decline in the adverse selection component. The increase in float dominates any possible information effects. A policy implication of this finding is that early release of firms from lock up restrictions, is likely to dramatically improve secondary market liquidity. 2008-09-18T07:28:20Z 2008-09-18T07:28:20Z 2005 2005 Research Report http://hdl.handle.net/10356/7035 Nanyang Technological University application/pdf
institution	Nanyang Technological University
building	NTU Library
continent	Asia
country	Singapore Singapore
content_provider	NTU Library
collection	DR-NTU
topic	DRNTU::Business::Marketing
spellingShingle	DRNTU::Business::Marketing Chandrasekhar Krishnamurti. Peh, Hwee Hwee. Lockup expiration, insider selling and bid-ask spreads.
description	Contrary to our expectation that lockup expiration should result in an exacerbation of the information asymmetry problem faced by market makers, we find an improvement in secondary market liquidity in the post-expiration period. For the subset of firms with reported insider sales during the 10-day post lockup expiration period, bid-ask spreads reduce by a larger percentage - mainly due to a decline in the adverse selection component. The increase in float dominates any possible information effects. A policy implication of this finding is that early release of firms from lock up restrictions, is likely to dramatically improve secondary market liquidity.
author2	Nanyang Business School
author_facet	Nanyang Business School Chandrasekhar Krishnamurti. Peh, Hwee Hwee.
format	Research Report
author	Chandrasekhar Krishnamurti. Peh, Hwee Hwee.
author_sort	Chandrasekhar Krishnamurti.
title	Lockup expiration, insider selling and bid-ask spreads.
title_short	Lockup expiration, insider selling and bid-ask spreads.
title_full	Lockup expiration, insider selling and bid-ask spreads.
title_fullStr	Lockup expiration, insider selling and bid-ask spreads.
title_full_unstemmed	Lockup expiration, insider selling and bid-ask spreads.
title_sort	lockup expiration, insider selling and bid-ask spreads.
publishDate	2008
url	http://hdl.handle.net/10356/7035
_version_	1772825721320767488

Lockup expiration, insider selling and bid-ask spreads.

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