IPO Lockup Expiration and InstitutionalInvestors Trading

We test the true unlock effect based on these withdrawal dates of lockup shares for 380 IPO firms from 2005 to 2014 in Taiwan, unlike previous studies which find no significant market returns based on regulation date. We find significantly negative abnormal returns around the first withdrawal date. We further show that institutional investors significantly react to these withdrawal events by selling shares and buying back shares before prices moved up. This action is especially more significant for mutual funds than for foreign institutional investors and dealers. Key words: Lockup expiration, institutional investors