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Investor Reactions (investor + reaction)
Selected AbstractsSENSITIVITY OF INVESTOR REACTION TO MARKET DIRECTION AND VOLATILITY: DIVIDEND CHANGE ANNOUNCEMENTSTHE JOURNAL OF FINANCIAL RESEARCH, Issue 1 2005Diane Scott Docking Abstract We examine whether investor reactions are sensitive to the recent direction or volatility of underlying market movements. We find that dividend change announcements elicit a greater change in stock price when the nature of the news (good or bad) goes against the grain of the recent market direction during volatile times. For example, announcements to lower dividends elicit a significantly greater decrease in stock price when market returns have been up and more volatile. Similarly, announcements to raise dividends tends to elicit a greater increase in stock price when market returns have been normal or down and more volatile, although this latter tendency lacks statistical significance. We suggest an explanation for these results that combines the implications of a dynamic rational expectations equilibrium model with behavioral considerations that link the responsiveness of investors to market direction and volatility. [source] Investor Reaction to Inter-corporate Business Contracting: Evidence and ExplanationECONOMIC NOTES, Issue 3 2006Fayez A. Elayan We examine the stock market reaction to 1227 inter-corporate ordinary business contract announcements reported by Dow Jones between January 1, 1990 and December 31, 2001. Around contract announcement dates, we find statistically significant positive average abnormal returns and abnormal trading volume for contractors, but insignificant positive abnormal returns and negative abnormal volume for contractees. Cross-sectionally, contract announcement period returns are higher for contractors who are small relative to the contract size, have higher return volatility, larger market-to-book ratios and higher profitability. The announcement period returns of contract-awarding firms are not significant and are only marginally related to cross-sectional explanatory factors. The results are consistent with two explanatory stories: contractor quasi-rents induced by the winner's curse and information signalling about contractor production costs. The results are not consistent with perfect competition, with contracts having positive net present values for both parties, and with a version of incomplete contracting theory. [source] Order Flow Patterns around Seasoned Equity Offerings and their Implications for Stock Price Movements,INTERNATIONAL REVIEW OF FINANCE, Issue 1-2 2005SAHN-WOOK HUH ABSTRACT In this study, we employ order imbalance measures to provide evidence that there is cross-sectional heterogeneity in investor reactions to seasoned equity offerings (SEOs). The normally positive relation between imbalances and returns disappears for trade number imbalances but remains intact for dollar imbalances following SEOs. The return-imbalance delinkage is most pronounced for SEO stocks in which institutions (non-institutions) are net sellers (buyers). We also find that the SEO portfolio in which large institutional investors are net sellers strongly underperforms the complementary portfolio in which they are net buyers. [source] Business portfolio restructuring, prior diversification posture and investor reactionsMANAGERIAL AND DECISION ECONOMICS, Issue 8 2003Robin T. Byerly This study examined firm performance in market reaction to two types of business portfolio restructuring announcements: refocusing and repositioning. We predicted that market performance effects for these two types of strategic restructurers would be moderated by prior diversification posture. The theory behind these expectations was built on a general premise that restructuring strategy would be more favorably viewed by the market as performance enhancing when it offered greater potential for organizational transformation. Results showed strong support for our conclusion that prior diversification posture poses a significant contingency factor in restructuring firms' strategic choices. Further, the market tended to respond more favorably with this sample to repositioning restructuring choices. Copyright © 2003 John Wiley & Sons, Ltd. [source] SENSITIVITY OF INVESTOR REACTION TO MARKET DIRECTION AND VOLATILITY: DIVIDEND CHANGE ANNOUNCEMENTSTHE JOURNAL OF FINANCIAL RESEARCH, Issue 1 2005Diane Scott Docking Abstract We examine whether investor reactions are sensitive to the recent direction or volatility of underlying market movements. We find that dividend change announcements elicit a greater change in stock price when the nature of the news (good or bad) goes against the grain of the recent market direction during volatile times. For example, announcements to lower dividends elicit a significantly greater decrease in stock price when market returns have been up and more volatile. Similarly, announcements to raise dividends tends to elicit a greater increase in stock price when market returns have been normal or down and more volatile, although this latter tendency lacks statistical significance. We suggest an explanation for these results that combines the implications of a dynamic rational expectations equilibrium model with behavioral considerations that link the responsiveness of investors to market direction and volatility. [source] Tax Costs and Signalling Benefits: The Impact of Surplus ACTJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 3-4 2002Lynn Hodgkinson Companies with surplus ACT are faced with additional tax costs if they use dividends to signal information to investors, hence there is a trade-off between tax costs and signalling benefits. This paper provides evidence that investors' reactions to dividend surprises are influenced by the signal generated by earnings and tax planning considerations. The results indicate that in the presence of a positive earnings signal and a binding tax constraint, decreases in dividends are value enhancing. [source] | ||||||||||