In this study we examine pre‐takeover volume run‐ups preceding tender offer announcements from 1982 to 1985 and consider three possible explanations for the run‐ups: (1) they are due primarily to registered insiders, (2) they are due to market anticipation of the impending event by informed outsiders, and (3) they are due (at least in part) to “positive feedback” investors—i.e., those who observe early price and volume increases and buy to “chase the trend.” Our results suggest that pre‐announcement volume run‐ups are largely due to trading by registered insiders. We explain this phenomenon in the context of the relatively lax regulatory environment during the period studied.