TY - JOUR
T1 - New evidence of lockup provisions
T2 - effects on IPO demands
AU - Mohd-Rashid, Rasidah
AU - Khaw, Karren Lee-Hwei
AU - Mehmood, Waqas
AU - Tajuddin, Ahmad Hakimi
N1 - Funding Information:
The authors also would like to acknowledge their gratitude for funding from Universiti Utara Malaysia (Geran Penjanaan) (S/O Code: 21124).
Publisher Copyright:
© 2022 World Association for Triple helix and Future strategy studies. All rights reserved.
PY - 2022
Y1 - 2022
N2 - This study examines the impacts of a mandatory lockup ratio and lockup period, together with voluntary lockup, on the initial public offering (IPO) subscription rate in Malaysia. A sample of 390 IPOs launched from 2000 to 2016 was collected for analysis. The findings show that firms that adopt a lower lockup ratio and a shorter lockup period signal uncertainty about their prospects. Issuers would then show the tendency to underprice to increase investors’ intention to subscribe to firms’ IPO shares. This study concludes that as long as investors are aware of pertinent information about IPO firms, they should continue participating in the IPO market rather than behaving irrationally. Finally, policymakers could use the findings to improve the existing lockup provisions regulation.
AB - This study examines the impacts of a mandatory lockup ratio and lockup period, together with voluntary lockup, on the initial public offering (IPO) subscription rate in Malaysia. A sample of 390 IPOs launched from 2000 to 2016 was collected for analysis. The findings show that firms that adopt a lower lockup ratio and a shorter lockup period signal uncertainty about their prospects. Issuers would then show the tendency to underprice to increase investors’ intention to subscribe to firms’ IPO shares. This study concludes that as long as investors are aware of pertinent information about IPO firms, they should continue participating in the IPO market rather than behaving irrationally. Finally, policymakers could use the findings to improve the existing lockup provisions regulation.
KW - Asian
KW - investor’s demand
KW - IPOs
KW - lockup period
KW - lockup ratio
UR - http://www.scopus.com/inward/record.url?scp=85142544123&partnerID=8YFLogxK
U2 - 10.17477/jcea.2022.21.1.043
DO - 10.17477/jcea.2022.21.1.043
M3 - Article
AN - SCOPUS:85142544123
SN - 2383-9449
VL - 21
SP - 43
EP - 52
JO - Journal of Contemporary Eastern Asia
JF - Journal of Contemporary Eastern Asia
IS - 1
ER -