Abstract
This paper examines the IPO anomalous behavior in the immediate aftermarket from two dimensions; initial return and flipping activity. In light of the commencement of lockup provision in May 1999 to displace the profit guarantee on issuing companies, this study examines the effect of both extent and length of the lockup provision on the behavior of the IPOs in the immediate aftermarket. Employing data of 383 Malaysian IPOs from January 2000 to December 2013, this study finds that both dimensions of lockup provision influence flipping activity via its committing role. The results implies that while initial returns are not affected by the imposition of lockup provision, the provision does play an effective role in restricting flipping activity of Malaysian IPOs.
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