We find strong evidence that analysts tend to have downward-biased earnings estimates immediately before merger announcement dates when earning announcement date is within a 60 day window prior to merger announcement date. Compared to pure stock deals, acquirer stocks in cash-only deals tend to...

We find strong evidence that analysts tend to have downward-biased earnings estimates immediately before merger announcement dates when earning announcement date is within a 60 day window prior to merger announcement date. Compared to pure stock deals, acquirer stocks in cash-only deals tend to...

This paper examines changes in acquirer and target companies' Credit Default Swap (CDS) spreads as a proxy for default risk around official mergers and acquisitions (M&A) announce-ments. Related literature extensively documents wealth effects triggered by M&A from the shareholders' perspective,...

Recent research on blockholders focuses on activist hedge funds and documents positive stock but negative bond returns. This study investigates the role of blockholder heterogeneity on security market effects and target firm follow-on activities across three important dimensions: identity,...

This paper examines changes in Credit Default Swap (CDS) spreads as a proxy for default risk after M&A announcement for the companies involved. Existing literature extensively documents wealth effects triggered by M&A announcements from the shareholders' perspective, but there is limited...

We investigate the extent to which the scheduled release of macroeconomic indicators affects the acquirer's value in Mergers and Acquisitions (M&As). We find that M&As announced on days of the release of key macroeconomic indicators (i.e. indicator days) realize higher announcement period...

This article analyses the market reaction to stock splits announcements, using a unique US sample over the period 2000 to 2009. Our event study finds a significantly positive Cumulative Average Abnormal Return (CAAR) around the announcement date. Liquidity increases lead to higher stock price...

Why does the market react to companies’ announcements of strategic alternatives with a +5.2 percent return, only to experience a future return of -9.7 percent? We find evidence consistent with a mispricing explanation in that: (i) investors and analysts are overly optimistic about a potential...

This paper finds that the majority of stock price movements remain unexplained after controlling for both public and private information. This suggests that economists' inability to explain asset price movements is the result of either noise or naive asset pricing models.