Stock market reaction to the announcement of mergers and acquisitions in the US telecommunications industry

2002 ◽  
Author(s):  
T.G. Shusterman ◽  
J.R. Norsworthy ◽  
W. Bessler
Keyword(s):  
Stock Market ◽  
Mergers And Acquisitions ◽  
Market Reaction ◽  
Telecommunications Industry ◽  
Stock Market Reaction ◽  
The Us

scholarly journals FortuneFavors the Bold

2017 ◽  
Vol 52 (3) ◽  
pp. 895-925 ◽  
Author(s):  
Costanza Meneghetti ◽  
Ryan Williams
Keyword(s):  
Stock Market ◽  
Mergers And Acquisitions ◽  
Chief Executive Officers ◽  
Market Reaction ◽  
Chief Executive ◽  
Exogenous Shock ◽  
Stock Market Reaction ◽  
Corporate Decisions ◽  
Executive Officers

We investigate whether incentives to join theFortune500 affect corporate decisions. Firms closer to the cutoff appear to take actions to join the list by engaging in more mergers and acquisitions activity, bidding for larger targets, and paying higher takeover premia. Further, the relation is stronger for firms with more-entrenched chief executive officers, and the stock market reaction to bids is worse when bidders are close to theFortune500’s cutoff. A 1994 methodological change byFortuneacts as an exogenous shock for identification. Our results suggest that firms try to increase revenues to join theFortune500 but that such actions adversely affect shareholders.

Stock Market Reaction to Mergers and Acquisitions in Anticipation of a Subsequent Related Significant Event: Evidence from the Korean Telecommunications Industry

2005 ◽  
Vol 08 (02) ◽  
pp. 185-200 ◽  
Author(s):  
Changi Nam ◽  
Dong-Hoon Yang ◽  
Myeong-Cheol Park ◽  
Gil-Hwan Oh ◽  
Jong-Hyun Park
Keyword(s):  
Stock Market ◽  
Mergers And Acquisitions ◽  
Telecommunications Industry ◽  
Shareholder Wealth ◽  
Good News ◽  
Mobile Service ◽  
Market Participants ◽  
Stock Market Reaction ◽  
Significant Events ◽  
Telecommunication Companies

The objective of this paper is to assess the effect of mergers and acquisitions on shareholder wealth when subsequent related significant events are anticipated. We identify a particular merger and acquisition between telecommunication companies in Korea and examine whether it conveys good or bad news to stock market participants. We hypothesize and find that mergers and acquisitions are interpreted as good news by the marketplace when they are expected to be accompanied by a subsequent related significant event, in our case granting of a government license for the IMT-2000 mobile service.

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