M&amp;A rumors about unlisted firms

Alperovych, Yan; Cumming, Douglas J.; Czellar, Veronika; Groh, Alexander Peter

doi:10.1016/j.jfineco.2021.05.012

Cited by 25 publications

(21 citation statements)

References 58 publications

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“…Rumours often give rise to negative financial market outcomes and at time securities violations (Alperovych et al, 2021; Van Bommel, 2003). We might therefore conjecture that more securities violations will happen due to work at the office through the channel of rumours.…”

Section: Background Theory and Hypothesesmentioning

confidence: 99%

Work‐from‐home and the risk of securities misconduct

Kanungo

Firth

Gathergood

et al. 2023

Euro Fin Management

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In the wake of the global pandemic, a challenge for CEOs and boards is to set a stakeholder‐acceptable organizational balance between remote and traditional office working. However, the risks of work‐from‐home are not yet fully understood. We describe competing theories that predict the effect on misconduct of a corporate shift to work‐from‐home. Using internal bank data on securities traders we exploit lockdown variation induced by emergency regulation of the Covid‐19 pandemic. Our difference‐in‐differences analysis reveals that working from home lowers the likelihood of securities misconduct; ultimately those working from home exhibit fewer misconduct alerts. The economic significance of these changes is large. Our study makes an important step toward understanding the link between the balance of work locations and the risk that comes with this tradeoff.

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Section: Background Theory and Hypothesesmentioning

confidence: 99%

Work‐from‐home and the risk of securities misconduct

Kanungo

Firth

Gathergood

et al. 2023

Euro Fin Management

Self Cite

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“…However, investors can still obtain some information about the private targets, albeit less accurately or sufficiently, from various sources such as financial analysts or parties involved in the deal negotiation. As asserted in Alperovych et al (2021), rumors about unlisted firms "may be spread on purpose or emerge accidentally while transaction values are only observable for completed deals." Similarly, Aktas et al (2001) provide evidence of information leakage hypothesis by showing abnormal stock returns for private targets before M&A announcements.…”

Section: Market Response To Acquired Assets On Manda Announcement Daysmentioning

confidence: 99%

“…As asserted in Alperovych et al . (2021), rumors about unlisted firms “may be spread on purpose or emerge accidentally while transaction values are only observable for completed deals.” Similarly, Aktas et al . (2001) provide evidence of information leakage hypothesis by showing abnormal stock returns for private targets before M&A announcements.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Market Responses to Private and Public Targets: The Role of Goodwill Valuation*

Kwon

Wang

2022

Asia-Pac J of Fin Stud

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Investors overprice goodwill value acquired from a private target during a merger and acquisition (M&A) announcement. However, the overpricing of goodwill is corrected in the years following the deal's completion. Our results show that investors predict the decreasing value of goodwill and promptly adjust their pricing regardless of goodwill impairment. The differential market reactions to goodwill between private and public targets are economically significant. The pricing on goodwill obtained from a private target is 47% higher around the announcements and 44% (33%) lower one (two) year(s) after the M&A completion than that from the public target.

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“…2 Against this background, it is important to understand the role that speculative news and rumors play for firms and markets. The literature suggests that rumors can manipulate stock prices (e.g., van Bommel, 2003;Schmidt, 2020) and affect mergers (e.g., Ahern and Sosyura, 2015;Alperovych et al, 2021). Yet, virtually nothing is known about the operational consequences that rumors may have for the firms involved.…”

mentioning

confidence: 99%

“…While we know that rumors can manipulate stock prices and affect price discovery (e.g., Benabou and Laroque, 1992;van Bommel, 2003;Schmidt, 2020;Jia et al, 2020), the literature has been relatively silent with regard to how rumors may directly affect the firms involved. Ahern and Sosyura (2015) and Alperovych et al, (2021) provide evidence that rumors affect takeovers of public and private firms. However, we know virtually nothing about the potential operational consequences that rumors may bring about.…”

mentioning

confidence: 99%