Journal of Finance Vol. 53 No. 6 1998
Venture Capital Distributions: Short-Run and Long-Run Reactions
Abstract
Venture capital distributions, a legal form of insider trading, provides an ideal arena for examining the share price impact of transactions by informed parties. These sales, which occur after substantial run-ups in share value, generate a substantial price reaction immediately around the event. In the months after distribution, returns apparently continue to be negative. When the short- and long-run reactions are decomposed, they are consistent with the view that venture capitalists use inside information to time stock distributions: Distributions of firms brought public by lower quality underwriters and of less seasoned firms have more negative price reactions.
- DOI
- https://doi-org.proxy.lib.uiowa.edu/10.1111/0022-1082.00086
- Volume
- 53
- Issue
- 6
- Pages
- 2161-2183
- Sources
- bibtex:phds-export.bib