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- Title
Interaction Between Short Selling and Potential Insider Selling in the IPO Aftermarket.
- Authors
Johnston, Jarrod; Madura, Jeff; Harper, Joel T.
- Abstract
We document the determinants of short interest in newly public firms during the lockup period and how short interest influences the valuation effects surrounding lockup expiration. We find that the short interest is larger for stocks that have more downward price potential at lockup expiration. We also find that the stocks that are subjected to larger short positions experience more pronounced negative valuation effects upon lockup expiration. Finally, we find that the stocks with a larger short interest position just after lockup expiration experience weaker returns during the following the six-month period.
- Subjects
SHORT selling (Securities); PRICES of securities; BUSINESS enterprises; SECURITIES; HEDGING (Finance); MARGIN accounts
- Publication
Journal of Financial Services Research, 2005, Vol 27, Issue 3, p283
- ISSN
0920-8550
- Publication type
Article
- DOI
10.1007/s10693-005-1805-z