Post-IPO Flipping and Turnover: Predictive Factors for Long-Run Returns (2001)
BibTeX
@MISC{Bash01post-ipoflipping,
author = {Boulat A. Bash},
title = {Post-IPO Flipping and Turnover: Predictive Factors for Long-Run Returns},
year = {2001}
}
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Abstract
I show that, consistent with Krigman, Shaw, and Womack’s (1999) findings on flipping activity, one-year IPO returns are predicted by first-day flipping activity. That is, when block flipping is low, returns are high. I extend their flipping methodology to incorporate the information through the end of the quiet period (25 calendar days after the IPO) and show that flipping during this period is even more informative than the first-day signal. In addition, I find that a higher average relative level of turnover to the end of the quiet period (volume as a percent of shares offered) is significant in predicting higher one-year stock returns beginning after the quiet period. Finally, in examining the time series of flipping from 1993 through 1999, I show that Depository Trust Company’s (DTC) IPO tracking system which began in 1997 has had a substantial impact on lowering the amount of subsequent flipping. I thank Bruce Sacerdote and Kent Womack for helpful comments. I acknowledge the
Keyphrases
quiet period predictive factor post-ipo flipping long-run return time series average relative level subsequent flipping depository trust company substantial impact helpful comment flipping methodology one-year ipo return bruce sacerdote first-day signal kent womack block flipping calendar day one-year stock return first-day flipping activity
