Beschreibung:
We study strategic trading by a blockholder who can intervene over time to influence the firm's cash flows. We consider the impact of asymmetric information on the incentives of the blockholder to trade, and study when information asymmetry increases blockholder ownership and leads to greater firm value. Asymmetric information reduces the speed of blockholder trading if private information is sufficiently persistent, but can increase it otherwise. We study how the presence of liquidity shocks, leading to a noisy equilibrium, creates Rachet effects whereby the blockholder's (endogenous) trading plans induce him to distort the firm cash flows to manipulate the stock price