Effect of Lockup Agreements on Buyout Backed Initial Public Offerings

Author

Grant B. Heffernan, Claremont McKenna CollegeFollow

Graduation Year

Spring 2011

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Lisa Meulbroek

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2011 Grant Heffernan

Abstract

Using a sample of 279 buyout backed firms, I examined the effect of lockup agreements on the firm’s stock returns. I found there to be a negative .8 percent cumulative abnormal return for the three-day period surrounding lockup expiration. Consistent with my hypothesis the CAR for the three-day period surrounding lockup expiration was less negative for buyout backed IPOs compared to venture capital backed IPOs. In addition, I found there to be an abnormal 24.24 percent increase in trading volume for the three days surrounding lockup expiration.

Recommended Citation

Heffernan, Grant B., "Effect of Lockup Agreements on Buyout Backed Initial Public Offerings" (2011). CMC Senior Theses. 183.
https://scholarship.claremont.edu/cmc_theses/183