Non-GAAP measure disclosure and insider trading incentives in high-tech IPO firms

IF 2.4 Q2 BUSINESS, FINANCE Accounting Research Journal Pub Date : 2021-12-10 DOI:10.1108/arj-01-2021-0016
Bishal Bc, Bo Liu
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引用次数: 1

Abstract

Purpose This paper aims to investigate whether the non-generally accepted accounting principles (GAAP) performance measures (NGMs) disclosure by high-tech initial public offering (IPO) firms signal firms’ efforts to maintain relatively high stock price levels before the expiration of the lock-up period to benefit insider selling. Design/methodology/approach The authors perform ordinary least squares and logit regressions using financial statement data and hand collected data on NGM disclosures for high-tech firms during the IPO process. Findings The authors find that the top executives of high-tech IPO firms with NGM disclosures are significantly more likely to sell and sell significantly more insider shares at the lock-up expiration than those of high-tech IPO firms without NGM disclosures. At the same time, while high-tech NGM firms have stock returns similar to their counterparts without NGMs for the period before the lock-up expiration, their stock returns are substantially lower after insider selling following the lock-up expiration. Practical implications By documenting the negative association between NGM disclosures and post-lockup expiration stock performance, the study highlights managerial deliberate optimism about the firm’s prospects which may not materialize. Hence, investors should take the NGM disclosures with a grain of salt. Originality/value This paper fills a notable void in the non-GAAP reporting literature by documenting a statistically and economically significant positive association between managerial equity trading incentives and NGM disclosures by high-tech IPO firms.
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高科技IPO公司的非GAAP指标披露和内幕交易激励
目的本文旨在调查高科技首次公开募股(IPO)公司披露的非公认会计原则(GAAP)绩效指标是否表明公司努力在锁定期到期前保持相对较高的股价水平,以利于内幕交易。设计/方法论/方法作者使用财务报表数据和手工收集的高科技公司IPO过程中NGM披露数据进行普通最小二乘法和logit回归。研究结果作者发现,与未披露NGM的高科技IPO公司相比,披露了NGM的科技IPO公司的高管在锁定到期时出售和出售的内幕股票要多得多。与此同时,虽然高科技NGM公司在锁定到期前的一段时间内的股票回报率与没有NGM的同行相似,但在锁定到期后进行内幕交易后,其股票回报率要低得多。实际含义通过记录NGM披露与锁定到期后股票表现之间的负面关联,该研究强调了管理层对公司前景的谨慎乐观,而这种乐观可能不会实现。因此,投资者应该对NGM的披露持谨慎态度。原创性/价值本文通过记录高科技IPO公司的管理层股权交易激励与NGM披露之间具有统计和经济意义的正相关关系,填补了非GAAP报告文献中的一个显著空白。
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来源期刊
Accounting Research Journal
Accounting Research Journal BUSINESS, FINANCE-
CiteScore
5.00
自引率
0.00%
发文量
13
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