Insider trading in takeover targets

Agrawal, Anup; Nasser, Tareque

doi:10.1016/j.jcorpfin.2012.02.006

Cited by 133 publications

(120 citation statements)

References 64 publications

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“…29 Chung, Elder, and Kim (2010) show that firms with better corporate governance have higher liquidity. 30 Agrawal and Nasser (2012) show that insiders in takeover targets engage in profitable passive insider trading by increasing their net purchases by reducing sales more than they reduce purchases. sample have zero trading during any given quarter.…”

Section: Methodsmentioning

confidence: 99%

Do Overvaluation-Driven Stock Acquisitions Really Benefit Acquirer Shareholders?

Akbulut¹

2013

J. Financ. Quant. Anal.

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I study the effects of overvalued equity on acquisition activity and shareholder wealth, using managers' insider trades to measure overvaluation. I find that overvalued equity drives managers to make stock acquisitions, and such acquisitions destroy value for acquirer shareholders. Overvalued stock acquirers earn negative and lower returns in the short run and substantially underperform similarly overvalued nonacquirer firms in the long run. My results do not support the idea that managers can benefit shareholders by converting overvalued equity into real assets through stock acquisitions.

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Section: Methodsmentioning

confidence: 99%

Do Overvaluation-Driven Stock Acquisitions Really Benefit Acquirer Shareholders?

Akbulut¹

2013

J. Financ. Quant. Anal.

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“…However, realistically, corporate insiders may not possess equal amounts of superior information all the time. In fact, they are presumed to have more informational advantage during certain times such as prior to earnings announcements or takeover announcements (see Agrawal and Nasser, 2012;Ke et al, 2003). Insider trades are also relatively infrequent, owing to the trading restrictions imposed on them by firm trading policies.…”

Section: Prior Work On the Relation Between Insider Trading And Informentioning

confidence: 99%

Does director trading change the information environment?

Chang

Qian

et al. 2016

Australian Journal of Management

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Investigating ASX300 firms for the period 2002-2010, we find that the information content of director trading has a negative relationship with post-trade information asymmetry, but a positive relationship with information efficiency. These results are mainly driven by director purchases rather than their sales, and are stronger in non-executive director trading. Our results are robust to the adoption of IFRS in 2005 and the global financial crisis in 2008. These findings back the claims of insider trading proponents, by showing that director trading plays a crucial role in reducing information asymmetry and in improving information efficiency for stock market participants.JEL Classification: G14, G30

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“…This assumption is bolstered by evidence Agrawal and Nasser (2011),. using reported trades by insiders, document that insiders in target companies surreptitiously increase their net buys (decrease sells more than they decrease buys) before M&A announcements.…”

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confidence: 94%