Skip to main content

Main menu

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JPM
    • Awards
    • Editorial Board
    • Published Ahead of Print (PAP)
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

User menu

  • Sample our Content
  • Request a Demo
  • Log in

Search

  • ADVANCED SEARCH: Discover more content by journal, author or time frame
The Journal of Portfolio Management
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Sample our Content
  • Request a Demo
  • Log in
The Journal of Portfolio Management

The Journal of Portfolio Management

ADVANCED SEARCH: Discover more content by journal, author or time frame

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JPM
    • Awards
    • Editorial Board
    • Published Ahead of Print (PAP)
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter
Primary Article

Effect of Underpricing and Lock-Up Provisions in IPOs

Norton Garfinkle, Burton G. Malkiel and Costin Bontas
The Journal of Portfolio Management Spring 2002, 28 (3) 50-58; DOI: https://doi.org/10.3905/jpm.2002.319842
Norton Garfinkle
The chairman of Princeton Scientific Capital Management in New York (NY 10021).
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
Burton G. Malkiel
A professor of economics at the Bendheim Center for Finance at Princeton University in Princeton (NJ 08540).
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
Costin Bontas
With the Bendheim Center for Finance at Princeton University in Princeton (NJ 08540).
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • For correspondence: cbontas@princeton.edu
  • Article
  • Info & Metrics
  • PDF (Subscribers Only)
Loading

Abstract

This article examines two issues regarding initial equity public offerings (IPOs) of 775 firms that came to market between July 1, 1997, and December 31, 1999. First, a study of the underpricing of new issues indicates that first–day excess returns are greater for venture–backed IPOs, high–tech firms, and firms underwritten by top–rung investment bankers, and in months following high previous–month Nasdaq returns. Second, the authors look at the longer–run performance of IPOs and the effect of the so–called lock–up provision, which restricts initial founders and owners of the IPO from selling their shares for a period of time. They find a statistically significant increase in trading volume on the day following the unlock date. Prices begin to fall, however, prior to the end of the lock–up period as the market anticipates the selling that is likely to follow. There is a substantial negative excess return for shareholders who buy new issues in the open market immediately after the IPO.

  • © 2002 Pageant Media Ltd

Don’t have access? Click here to request a demo

Alternatively, Call a member of the team to discuss membership options

US and Overseas: +1 646-931-9045

UK: 0207 139 1600

Log in using your username and password

Forgot your user name or password?
PreviousNext
Back to top

Explore our content to discover more relevant research

  • By topic
  • Across journals
  • From the experts
  • Monthly highlights
  • Special collections

In this issue

The Journal of Portfolio Management
Vol. 28, Issue 3
Spring 2002
  • Table of Contents
  • Index by author
Download PDF
Article Alerts
Sign In to Email Alerts with your Email Address
Email Article

Thank you for your interest in spreading the word on The Journal of Portfolio Management.

NOTE: We only request your email address so that the person you are recommending the page to knows that you wanted them to see it, and that it is not junk mail. We do not capture any email address.

Enter multiple addresses on separate lines or separate them with commas.
Effect of Underpricing and Lock-Up Provisions in IPOs
(Your Name) has sent you a message from The Journal of Portfolio Management
(Your Name) thought you would like to see the The Journal of Portfolio Management web site.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Citation Tools
Effect of Underpricing and Lock-Up Provisions in IPOs
Norton Garfinkle, Burton G. Malkiel, Costin Bontas
The Journal of Portfolio Management Apr 2002, 28 (3) 50-58; DOI: 10.3905/jpm.2002.319842

Citation Manager Formats

  • BibTeX
  • Bookends
  • EasyBib
  • EndNote (tagged)
  • EndNote 8 (xml)
  • Medlars
  • Mendeley
  • Papers
  • RefWorks Tagged
  • Ref Manager
  • RIS
  • Zotero
Save To My Folders
Share
Effect of Underpricing and Lock-Up Provisions in IPOs
Norton Garfinkle, Burton G. Malkiel, Costin Bontas
The Journal of Portfolio Management Apr 2002, 28 (3) 50-58; DOI: 10.3905/jpm.2002.319842
del.icio.us logo Digg logo Reddit logo Twitter logo CiteULike logo Facebook logo Google logo LinkedIn logo Mendeley logo
Tweet Widget Facebook Like LinkedIn logo

Jump to section

  • Article
  • Info & Metrics
  • PDF (Subscribers Only)
  • PDF (Subscribers Only)

Similar Articles

Cited By...

  • No citing articles found.
  • Google Scholar

More in this TOC Section

  • Do Risk Factors Eat Alphas?
  • An Assessment of Terrorism-Related Investing Strategies
  • Dividends versus Share Repurchase
Show more Primary Article
LONDON
One London Wall, London, EC2Y 5EA
United Kingdom
+44 207 139 1600
 
NEW YORK
41 Madison Avenue, New York, NY 10010
USA
+1 646 931 9045
pm-research@pageantmedia.com
 

Stay Connected

  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

MORE FROM PMR

  • News
  • Awards
  • Investment Guides
  • Videos
  • About PMR

INFORMATION FOR

  • Academics
  • Agents
  • Authors
  • Content Usage Terms

GET INVOLVED

  • Advertise
  • Publish
  • Article Licensing
  • Contact Us
  • Subscribe Now
  • Sign In
  • Update your profile
  • Give us your feedback

© 2021 Pageant Media Ltd | All Rights Reserved | ISSN: 0095-4918 | E-ISSN: 2168-8656

  • Site Map
  • Terms & Conditions
  • Privacy Policy
  • Cookies