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Does market misvaluation drive post-acquisition underperformance in stock deals?
16 references·2 citing·38 second hopsampled
Does market misvaluation drive post-acquisition underperformance in stock deals? (2010)Does market misvaluation drive post-acqui…Who makes acquisitions? CEO overconfidence and the market's reaction☆ (2008)Who makes acquisitions? CEO o…Wealth Destruction on a Massive Scale? A Study of Acquiring‐Firm Returns in the Recent Merger Wave (2005)Wealth Destruction on a Massi…Stock market driven acquisitions (2003)Stock market driven acquisiti…Market Timing and Capital Structure (2002)Market Timing and Capital Str…New Evidence and Perspectives on Mergers (2001)New Evidence and Perspectives…Managerial Decisions and Long‐Term Stock Price Performance (2000)Managerial Decisions and Long…Improved Methods for Tests of Long‐Run Abnormal Stock Returns (1999)Improved Methods for Tests of…Market efficiency, long-term returns, and behavioral finance1The comments of Brad Barber, David Hirshleifer, S.P. Kothari, Owen Lamont, Mark Mitchell, Hersh Shefrin, Robert Shiller, Rex Sinquefield, Richard Thaler, Theo Vermaelen, Robert Vishny, Ivo Welch, and a referee have been helpful. Kenneth French and Jay Ritter get special thanks.1 (1998)Market efficiency, long-term …Detecting long-run abnormal stock returns: The empirical power and specification of test statistics (1997)Detecting long-run abnormal s…Detecting abnormal operating performance: The empirical power and specification of test statistics (1996)Detecting abnormal operating …The New Issues Puzzle (1995)The New Issues PuzzleEarnings, Book Values, and Dividends in Equity Valuation* (1995)Earnings, Book Values, and Di…Common risk factors in the returns on stocks and bonds (1993)Common risk factors in the re…The Hubris Hypothesis of Corporate Takeovers (1986)The Hubris Hypothesis of Corp…RISK, UNCERTAINTY, AND DIVERGENCE OF OPINION (1977)RISK, UNCERTAINTY, AND DIVERG…Risk, Return, and Equilibrium: Empirical Tests (1973)Risk, Return, and Equilibrium…Equity overvaluation, insider trading activity, and M&A premium: Evidence from China (2023)Equity overvaluation, insider…Strategic investment acquisitions performance in UK firms: the impact of managerial overconfidence (2019)Strategic investment acquisit…CAPITAL ASSET PRICES: A THEORY OF MARKET EQUILIBRIUM UNDER CONDITIONS OF RISK* (1964)The Cross-Section of Expected Stock Returns (1992)On Persistence in Mutual Fund Performance (1997)Illiquidity and stock returns: cross-section and time-series effects (2002)A five-factor asset pricing model (2014)Judgment under Uncertainty: Heuristics and Biases (1975)The Framing of Decisions and the Psychology of Choice (1981)The market for corporate control (1983)Efficient Capital Markets: II (1991)A Survey of Corporate Governance (1997)CEO Overconfidence and Corporate Investment (2005)The Cost of Capital, Corporation Finance and the Theory of Investment (1958)Dividend Policy, Growth, and the Valuation of Shares (1961)The Theory and Measurement of Business Income (1961)Valuation and Clean Surplus Accounting for Operating and Financial Activities* (1995)Capital markets research in accounting (2001)Does Corporate Social Responsibility Affect the Cost of Capital? (2010)The Behavior of Stock-Market Prices (1965)THE VALUATION OF RISK ASSETS AND THE SELECTION OF RISKY INVESTMENTS IN STOCK PORTFOLIOS AND CAPITAL BUDGETS**This paper is another in a series of interrelated theoretical and statistical studies of corporate financial and investment policies being made under grants from the Rockefeller Foundation, and more recently the Ford Foundation, to the Harvard Business School. The generous support for this work is most gratefully acknowledged. The author is also much indebted to his colleagues Professors Bishop, Christenson, Kahr, Raiffa, and (especially) Schlaifer, for extensive discussion and commentary on an earlier draft of this paper; but responsibility for any errors or imperfections remains strictly his own.[Professor Sharpe's paper, “Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk” (Journal of Finance, September 1964) appeared after this paper was in final form and on its way to the printers. My first section, which parallels the first half of his paper (with corresponding conclusions), sets the algebraic framework for sections II, III and VI, (which have no counterpart in his paper) and for section IV on the equilibrium prices of risk assets, concerning which our results differ significantly for reasons which will be explored elsewhere. Sharpe does not take up the capital budgeting problem developed in section V below.] (1975)Using daily stock returns (1985)Introductory Econometrics for Finance (2008)The Pricing of Options and Corporate Liabilities (1973)Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors (2000)The Cross‐Section of Volatility and Expected Returns (2006)All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors (2007)The relationship between return and market value of common stocks (1981)Investor Psychology and Security Market Under‐ and Overreactions (1998)Investor Sentiment and the Cross‐Section of Stock Returns (2006)Determinants of corporate borrowing (1977)Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers (1986)Managing with Style: The Effect of Managers on Firm Policies (2003)Psychology and Economics: Evidence from the Field (2009)Are Overconfident CEOs Better Innovators? (2012)Theory of the firm: Managerial behavior, agency costs and ownership structure (1976)Corporate financing and investment decisions when firms have information that investors do not have (1984)Capital Structure Decisions: Which Factors Are Reliably Important? (2007)Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches (2008)Firm size and the gains from acquisitions (2004)
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References

  • 1993Common risk factors in the returns on stocks and bonds26,615 cited
  • 1973Risk, Return, and Equilibrium: Empirical Tests14,248 cited
  • 1995Earnings, Book Values, and Dividends in Equity Valuation*5,061 cited
  • 2002Market Timing and Capital Structure3,804 cited
  • 1986The Hubris Hypothesis of Corporate Takeovers3,764 cited
  • 1977RISK, UNCERTAINTY, AND DIVERGENCE OF OPINION3,714 cited
  • 1995The New Issues Puzzle3,550 cited
  • 2001New Evidence and Perspectives on Mergers2,803 cited
  • 2008Who makes acquisitions? CEO overconfidence and the market's reaction☆2,763 cited
  • 1997Detecting long-run abnormal stock returns: The empirical power and specification of test statistics2,690 cited
  • 1998Market efficiency, long-term returns, and behavioral finance1The comments of Brad Barber, David Hirshleifer, S.P. Kothari, Owen Lamont, Mark Mitchell, Hersh Shefrin, Robert Shiller, Rex Sinquefield, Richard Thaler, Theo Vermaelen, Robert Vishny, Ivo Welch, and a referee have been helpful. Kenneth French and Jay Ritter get special thanks.12,572 cited
  • 2003Stock market driven acquisitions2,093 cited
  • 1999Improved Methods for Tests of Long‐Run Abnormal Stock Returns1,826 cited
  • 1996Detecting abnormal operating performance: The empirical power and specification of test statistics1,609 cited

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  • 2000Managerial Decisions and Long‐Term Stock Price Performance1,573 cited
  • 2005Wealth Destruction on a Massive Scale? A Study of Acquiring‐Firm Returns in the Recent Merger Wave1,421 cited
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    • 2019Strategic investment acquisitions performance in UK firms: the impact of managerial overconfidence24 cited
    • 2023Equity overvaluation, insider trading activity, and M&A premium: Evidence from China17 cited