Asset float and speculative bubbles
By: Harrison Hong, Jose Scheinkman, Wei Xiong.
Contributors: Scheinkman, José Alexandre.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11367; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11367.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Assets (Accounting); Speculation.
Description: "We model the relationship between asset float (tradeable shares) and speculative bubbles.  Investors trade a stock with limited float because of insider lock-ups.  They have heterogeneous beliefs due to overconfidence and face short-sales constraints.  A bubble arises as price overweighs optimists' beliefs and investors anticipate the option to resell to those with even higher valuations.  The bubble's size depends on float as investors anticipate an increase in float with lock-up expirations and speculate over the degree of insider selling.  Consistent with the internet experience, the bubble, turnover and volatility decrease with float and prices drop on the lock-up expiration date"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 7/1/2005.
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Mode of access: World Wide Web.