Prop Ups During Lockups

68 Pages Posted: 14 Oct 2008 Last revised: 16 Mar 2011

See all articles by Jens Martin

Jens Martin

University of Amsterdam - Finance Group

Date Written: March 1, 2011


The end of the lockup period for initial public offerings generally constitutes the first time corporate insiders sell significant numbers of shares on the market. I test the hypothesis that shareholders pressure analysts to support the share price until the end of the lockup period. In a sample of U.S. initial public offerings from 1996 to 2006, I find that analysts issue overly optimistic recommendations until the end of the lockup period. Furthermore, I find a significant downward revision of recommendations for the whole sample of firms as soon as the lockup period ends.

Keywords: IPO, booster shots, lockup period, analyst behaviour

JEL Classification: G14, G24

Suggested Citation

Martin, Jens, Prop Ups During Lockups (March 1, 2011). AFFI/EUROFIDAI, Paris December 2008 Finance International Meeting AFFI - EUROFIDAI, Available at SSRN: or

Jens Martin (Contact Author)

University of Amsterdam - Finance Group ( email )

Roetersstraat 18
Amsterdam, 1018 WB

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