Date of Submission
Campus Only Senior Thesis
Bachelor of Arts
Lockup expirations of insider trading for Initial Public Offerings (IPOs) act as a self-imposed event study opportunity within the finance and public market sector, giving unique post-event insight to subsequent insider trading decisions. This paper investigates whether investors can use insider trading after IPO lockup expiration to help predict short to medium-term firm abnormal returns. The paper builds upon prior research by using a similar calendar time approach and categorization method, while also utilizing a new insider trading categorization method abnormal returns calculation method in a more recent period of 2017-2021. The paper finds consistent insignificance across methodologies, with insider trading not having any indication of future short to medium-term returns. Overall, investors cannot justify using insider trading as an informed consideration when looking to invest in firms that have recently gone public.
Karasinski, Alexander, "The Predictive Power of Insider Trading Post IPO Lockup Expiration" (2022). CMC Senior Theses. 3085.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.