Insider Trading, Ownership Structure, and the Market Assessment of Corporate Sell-Offs

Authors

  • MARK HIRSCHEY,

  • JANIS K. ZAIMA

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    • School of Business, University of Kansas and School of Business, San Jose State University, respectively. We wish to thank Gailen L. Hite, the editor René M. Stulz, and an anonymous referee for several helpful suggestions. Of course, only we are responsible for any errors that remain.


ABSTRACT

This paper finds that the generally favorable assessment of corporate sell-off decisions is most apparent for closely held firms where insider net-buy activity is prevalent during the prior six-month period. This suggests that insider trader activity and ownership structure information are used by the market in the characterization of sell-off decisions as favorable or unfavorable for investors.

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