The Characteristics of the Block-Trading Activities Based on China IPO Price Performance

This paper studies whether the trading behavior of IPO block holders is informative to small investors. The results show that the level of block-trading activities is positively associated with the IPOs' price performance. They also show that IPO block holders do not have superior information on newly-listed companies. The block holders trade frequently in order to capture short-term profits. Offer-to-open return and market capitalization are the main factors affecting the block trading.