کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
982207 | 1480447 | 2014 | 11 صفحه PDF | دانلود رایگان |
• We examine the short term stock price performance of firms that acquire or sell technology rights.
• We find significant positive announcement-period abnormal returns to the acquirers and sellers.
• The price increases reverse during the subsequent twenty trading days.
• The reversal is confined to a subsample comprised of stocks that witness pre-announcement price decline.
• Stocks that witness price run-up prior to the announcement do not reverse to original prices but lose the momentum thereafter.
We examine the short term stock price performance of firms that acquire or sell technology rights. We find significant positive announcement-period abnormal returns to the acquirers and sellers. However, the price increases reverse during the subsequent twenty trading days. These quick fortune reversals cannot be attributed to methodology; they prevail in the late 1970s through the 2000s, in bear and bull stock markets, and in both high and low technology industries. Upon splitting the sample into two subsamples comprised each of stocks with either pre-announcement price run-up or decline; we find that the abnormal return reversal is confined to the latter subsample. Stocks that witness price run-up prior to the announcement do not reverse to original prices but lose the momentum right after the announcement-period. We believe this is caused by the combination effect of the momentum prior to-and the impact of the announcement.
Journal: The Quarterly Review of Economics and Finance - Volume 54, Issue 3, August 2014, Pages 371–381