Stock Recommendations, Mad Money , Price Pressure, Abnormal Returns, G11, G14,

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.

The lock-up agreement between an underwriter and an issuing firm's principals prohibits sale of securities for a period of time following the offering date. Investment banks must support the stock following an offering. The lock-up assures investors that the restricted shares will not enter the market, at least for a period of time. Negative abnormal returns prior to the lock-up release show that unrestricted investors liquidate positions prior to the scheduled lock-up release. Negative abnormal returns are more robust for f i i s that are not influenced by SEC Rule 144 than for firms that are.

We investigate the information content of equity analysts' recommendation changes subsequent to the passage of Regulation Fair Disclosure. We find that analyst upgrades (downgrades) are associated with positive (negative) abnormal returns. Overall, stock prices tend to react significantly more strongly to recommendation changes accompanied by news events than to those that are not. Even so, returns around recommendation changes not accompanied by news are significantly different from zero. This result holds after controlling for firm-specific variables and the incidence of multiple simultaneous recommendation changes. We conclude that analyst recommendation changes, in and of themselves, are informative. Copyright (c)2008, The Eastern Finance Association.