Car Associated With SEO Share Lockups: Real or Illusionary?
Posted: 5 Aug 2018
Date Written: March 1, 2015
This paper examines the cumulative abnormal return (CAR) associated with both the expiration and initiation of SEO share lockups. First, we find that the average CAR around the expiration of SEO share lockups is significantly negative, but this result is mainly attributed to inappropriate benchmarking of the CAR. Second, there is also, on average, a significant negative CAR at the initiation of SEO share lockups, but the negative CAR is a temporary phenomenon that reverses itself within a short period of time. Overall, our findings do not support the downward sloping demand curve hypothesis on the lockup expiration effect.
Keywords: SEO, Lockup Expiration, Cumulative Abnormal Return, Efficient Market, Downward Sloping Demand Curve, Temporary Price Pressure
JEL Classification: G00, G14, G24, G3
Suggested Citation: Suggested Citation