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Announcement Returns (announcement + return)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Business Groups and Tunneling: Evidence from Private Securities Offerings by Korean Chaebols

THE JOURNAL OF FINANCE, Issue 5 2006
JAE-SEUNG BAEK
ABSTRACT We examine whether equity-linked private securities offerings are used as a mechanism for tunneling among firms that belong to a Korean chaebol. We find that chaebol issuers involved in intragroup deals set the offering prices to benefit their controlling shareholders. We also find that chaebol issuers (member acquirers) realize an 8.8% (5.8%) higher (lower) announcement return than do other types of issuers (acquirers) if they sell private securities at a premium to other member firms, and if the controlling shareholders receive positive net gains from equity ownership in issuers and acquirers. These results are consistent with tunneling within business groups. [source]

INDUSTRY EFFECTS OF ANALYST STOCK REVISIONS

THE JOURNAL OF FINANCIAL RESEARCH, Issue 2 2006
Aigbe Akhigbe
Abstract We examine the industry valuation effects of analyst stock revisions and identify the variables that influence these effects. Our results show that industry rivals experience significant abnormal returns in response to revision announcements. Although the mean stock price response suggests contagion effects, there is also evidence of significant competitive effects. The valuation effects are influenced by the magnitude of the rated firm's announcement return, along with analyst-specific and industry-specific characteristics. However, the sensitivity of the valuation effects to these characteristics is conditioned on whether the industry effects are contagious or competitive. [source]

What Drives the S&P 500 Inclusion Effect?

FINANCIAL MANAGEMENT, Issue 4 2006
An Analytical Survey
We present an analytical survey of the explanations,price pressure, downward-sloping demand curves, improved liquidity, improved operating performance, and increased investor awareness,for the increase in stock value associated with inclusion in the S&P 500 Index. We find that increased investor awareness is the primary factor behind the cross-section of abnormal announcement returns. We also find some evidence of temporary price pressure around the inclusion date. We find no evidence that long-run downward-sloping demand curves for stocks, anticipated improvements in operating performance, or increased liquidity are related to the cross-section of announcement or inclusion returns. [source]

50+ Years of Diversification Announcements

FINANCIAL REVIEW, Issue 2 2010
Mehmet E. Akbulut
G34 Abstract This paper studies announcement returns from 4,764 mergers over 57 years to shed light on several controversies concerning corporate diversification. One prominent view is that diversification destroys value because of agency problems or internal investment distortions, but we find that combined (acquirer plus target) announcement returns are significantly positive for diversifying mergers throughout the period, and no lower than the returns for related mergers. The returns from diversifying acquisitions fell after 1980, and investors rewarded mergers involving financially constrained firms before but not after 1980, consistent with the idea that the value of internal capital markets declined over time. [source]