Do Stock Swap Bidders Suspend Their Stock Trading?

Chinese firms can suspend trading of their stocks when they announce major events. We find that stock-swap acquirers tend to suspend stock trading after a significant stock price run-up. Suspending bidders show significantly high returns both in the short and long run following the announcement of acquisitions if the bidder pays by stocks, while the returns are negatively associated with the pre-suspension run-up. These results suggest that stock-swap bidders take advantage of stock trading suspension when they identify a stock price run-up, while such a strategy sends a negative signal to the stock market