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DotCom Mania: The Rise and Fall of Internet Stock Prices.

Authors :
OFEK, ELI
RICHARDSON, MATTHEW
Source :
Journal of Finance (Wiley-Blackwell); Jun2003, Vol. 58 Issue 3, p1113-1137, 25p, 7 Charts, 4 Graphs
Publication Year :
2003

Abstract

This paper explores a model based on agents with heterogenous beliefs facing short sales restrictions, and its explanation for the rise, persistence, and eventual fall of Internet stock prices. First, we document substantial short sale restrictions for Internet stocks. Second, using data on Internet holdings and block trades, we show a link between heterogeneity and price effects for Internet stocks. Third, arguing that lockup expirations are a loosening of the short sale constraint, we document average, long-run excess returns as low as -33 percent for Internet stocks postlockup. We link the Internet bubble burst to the unprecedented level of lockup expirations and insider selling. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
00221082
Volume :
58
Issue :
3
Database :
Complementary Index
Journal :
Journal of Finance (Wiley-Blackwell)
Publication Type :
Academic Journal
Accession number :
9666263
Full Text :
https://doi.org/10.1111/1540-6261.00560