Journal of Banking & Finance Vol. 31 No. 9 2007
Do secondary shares in the IPO process have a negative effect on aftermarket performance?
Abstract
We revisit and extend the topic of secondary share sales and revisions in IPOs. First we test to determine if secondary share sales constitute a negative signal that is captured in aftermarket performance. We find secondary share sales in general are not correlated with poorer initial or long-run performance, but selling by officers and directors is associated with poorer long-run returns. Second, we examine if secondary share revisions (1) reflect selling shareholders’ attempts to conceal private information or (2) are contingent upon whether a firm can reach its goal of raising sufficient capital. We find empirical support for a capital goal, but not for concealment.
- DOI
- 10.1016/j.jbankfin.2006.09.016
- Volume
- 31
- Issue
- 9
- Pages
- 2612-2631
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib