IPO lockups and insider trading. By Ranko Jelic

Ranko Jelic (University of Sussex)

This seminar feature a presentation on the research of "IPO lockups and insider trading" conducted by Wasim Ahmad *, Wolfgang Aussenegg **, and Ranko Jelic ***a)

*Department of Accounting & Finance, Business School, University of Birmingham, B15 2TT UK.

E-mail: w.ahmad@bham.ac.uk

**Department of Finance and Corporate Control, Vienna University of Technology, Address: Theresianumgasse 27, A-1040 Vienna, Austria, E-mail: wolfgang.aussenegg@tuwien.ac. at.

*** (a) Corresponding author; School of Business, Management and Economics, University of Sussex, Address: Brighton, BN1 9SL, UK, E-mail: r.jelic@sussex.ac.uk, Phone: +44 1273 872597.

Abstract

We examine directors’ and VC firms’ dealings before, at and after lockup expiry. Our sample encompasses 1,781 purchase and 1,115 sale transactions of the insiders in 201 UK IPOs during the period 1999-2015. Overall, directors and VC firms tend to sell and purchase in contrast to the prevailing market sentiment. The exceptions are directors’ purchases before expiry and VC firms’ sales after expiry. Director dealings, especially purchases, produce a stronger price impact than dealings of VC firms. Among insiders, dealings of founders and founder-CEOs generate the strongest price impact.

JEL classification: D82, G12, G14, G15, G24

Keywords: IPO lockups, insider trades, venture capital