Research On The Influence Of Information Profit On The Quotation Of Institutional Investors

Since April 2012,the China Securities Regulatory Commission canceled the three months lockup period of IPO shares,and the institutional investors participating under the net inquiry can directly participate in the initial stock trading,the offline investors and online investors can share the initi al profits of the initial stock market.This reform attempts to motivate institutional investors to participate in inquiries and to improve the liquidity in the initial stage of IPO.However,for the online institutional investors with information advantages,how can the market motivate its true quotes,as the "decision-makers" of IPO pricing and at the same time as the "profiteer" of new shares.After the cancellation of IPO lockup period,what kind of moral risk does the information profit in the secondar y market bring to institutional investors quotation?This paper focuses on this problem.Firstly,we analyze three theoretical hypotheses of IPO lockup.Secondly,in the initial stage of new stock market,the market has high risk of information asymmetry,the information profit motivation is strong in the secondary market.Through the theoretical models,we analyze the mechanism of moral risk to institutional investors' quotation resulting from information profit in the secondary market.Finally,we analyze the cancellation of IPO lockup which is like a "natural experiment" through the empirical analysis.The impact of the secondary market profit on institutional investors' quotations is tested,and the three theoretical hypotheses of IPO lockup are tested s ystematically.The empirical results support the "signal hypothesis".The research of this paper finds that:(1)Information profit in the secondary market has affected the quoted price of the institutional investors participating in the inquiry,that is,the institutional investors who participate in the inquiry have the motivation of wrong quotation.Underwriters choose to institutional investors with high quotation to promote true quotes from institutional investors and thus to reduce the risk of false quotations by maximizing the share of institutional investors with high quotation.(2)Through empirical models,we verify that information profit in the secondary market has an impact on institutional investor quotations.In particular,after the cancellation of lockup period,we find that information profit in the secondary market has caused high quotation for institutional investors.(3)The sample was divided by the pre-IPO company's establishment years,and we found that information profitability level in the secondary market for companies with low established years have a higher influence on the quotations of institutional investors participating in the inquiry than companies with a high established years.(4)Dividing the sample with different levels of information profitability in the secondary market,we found that with different levels of information profitability,the motivaton of information profit in the secondary market has a significantly different effect on the quotation of institutional investors.This paper examines the impact of information profit in the secondary market on institutional investors' quotations for the first time,and provides a theoretical basis for the policy rules that the one who offers the highest price obtains the stock,and provides policy recommendations for the next step of policy reform.