Debt Structure Adjustments and Long-run Stock Price Performance

2000 ◽  
Author(s):  
Sudip Datta ◽  
Mai E. Iskandar-Datta ◽  
Kartik Raman
Keyword(s):  
Stock Price ◽  
Debt Structure ◽  
Price Performance ◽  
Long Run

Debt Structure Adjustments and Long-Run Stock Price Performance

2000 ◽  
Vol 9 (4) ◽  
pp. 427-453 ◽  
Author(s):  
Sudip Datta ◽  
Mai Iskandar-Datta ◽  
Kartik Raman
Keyword(s):  
Stock Price ◽  
Debt Structure ◽  
Price Performance ◽  
Long Run

Accounting and Stock Price Performance in Dynamic CEO Compensation Arrangements

2003 ◽  
Vol 78 (1) ◽  
pp. 143-168 ◽  
Author(s):  
John F. Boschen ◽  
Augustine Duru ◽  
Lawrence A. Gordon ◽  
Kimberly J. Smith
Keyword(s):  
Firm Performance ◽  
Stock Price ◽  
Ceo Compensation ◽  
Accounting Performance ◽  
Financial Gain ◽  
Price Performance ◽  
Long Run ◽  
Initial Effect ◽  
Ceo Pay

In this study we examine the long-run effects of unexpected firm performance on CEO compensation. We find that unexpectedly good accounting performance is initially associated with increases in CEO pay. However, this initial effect soon reverses, and is followed by lower CEO pay in later years. Overall, the CEO's long-run cumulative financial gain from unexpectedly good accounting performance is not significantly different from zero. In contrast, unexpectedly good stock price performance is associated with increases in CEO pay for several years. Thus, the CEO's long-run cumulative financial gain from unexpectedly good stock price performance is positive and significant.

scholarly journals The Long-Run Performance Following Convertible Debt Offerings: Does The Design Matter?

2014 ◽  
Vol 30 (3) ◽  
pp. 883
Author(s):  
Khalid El Badraoui ◽  
Jamal Ouenniche
Keyword(s):  
Stock Price ◽  
Empirical Studies ◽  
Convertible Bonds ◽  
Convertible Debt ◽  
Early Exercise ◽  
Price Performance ◽  
Long Run ◽  
Run Up ◽  
Timing Hypothesis ◽  
The Impact

<p>This paper examines the impact of convertible debt design on the long-run stock price performance of the issuing firms in France. More specifically, we divide French convertible bonds (CBs) into three categories; namely, debt-like, mixed, and equity-like CBs, based on their total conversion probability, which integrates the possibility of early exercise of the call feature. In line with previous empirical studies, our results show that French CB issuers experience a substantial increase in their stock price profitability before the offering followed by significant under-performance over the three year post-issue event window. However, the breakdown of our sample into three groups of CBs depending on their design reveals, on one hand, a strong evidence of stock price run-up before the offering only for equity-like and mixed CBs. On the other hand, the post-issue performance is worse only for equity-like issuers, indicating that the post-issue performance is poorer the more the convertible debt issuer's stock is over-valued prior to the offering. This finding is consistent with the market timing hypothesis.</p>

Marketing spending and aftermarket performance of IPO firms

2017 ◽  
Vol 35 (4) ◽  
pp. 560-576 ◽  
Author(s):  
Monica B. Fine ◽  
Kimberly Gleason ◽  
Michael Mullen
Keyword(s):  
Initial Public Offerings ◽  
Stock Price ◽  
Market Conditions ◽  
Content Type ◽  
Price Performance ◽  
Long Run ◽  
Short Run ◽  
Marketing Expenditures ◽  
Marketing Spending ◽  
The Impact

Purpose Increasingly, marketing managers are asked to consider the financial implications, in terms of both book and market values, when making strategic decisions. The purpose of this paper is to investigate the role of marketing expenditures in explaining the variation in the aftermarket performance of a sample of firms conducting initial public offerings (IPOs). Design/methodology/approach Theories from marketing and finance – market-based assets (MBA) theory and signaling theory respectively – serve as the conceptual basis of this paper. The results of this study, based on a sample of 2,103 IPOs covering the 1996 to 2008 time period, suggest that increased marketing spending positively impacts aftermarket (i.e. stock price) performance. Findings The authors find that while short-run aftermarket performance is positively and significantly impacted by pre-IPO marketing spending, long-run firm performance measures do not appear to be impacted by pre-IPO marketing spending. Further, pre-IPO marketing spending does not incrementally reduce underpricing or improve long-run performance when the IPO takes place during extreme market conditions such as recessions or hot markets, and these results are important to the shareholders and potential investors in the firm. Research limitations/implications Theoretically this paper advances the literature on the marketing-finance interface by extending the MBA and signaling theories. For practice, the results indicate that spending more money on marketing before the IPO and disclosing this information produces positive bottom-line results for the firm. Originality/value While Luo (2008) documents a significant relationship between the firms’ pre-IPO marketing spending and IPO underpricing, few studies explore the impact of marketing spending on stock price performance beyond the first day of trading. This paper makes three unique contributions. First, the authors extend Luo’s study by investigating the effect of marketing expenditures on underpricing during extreme market conditions. Second, the authors are the first to examine IPO performance in the long-run as well as the short-run. Finally, the authors assess how long-run performance is impacted by marketing spending during extreme market conditions. The findings of this study has implications for managers and shareholders of firms considering going public through a traditional IPO.

SHARE REPURCHASES AND FIRM BEHAVIOR

2009 ◽  
Vol 12 (05) ◽  
pp. 605-631 ◽  
Author(s):  
ADRI DE RIDDER
Keyword(s):  
Stock Price ◽  
Firm Behavior ◽  
Complete Information ◽  
Share Price ◽  
Share Repurchases ◽  
Data Set ◽  
Strategic Trading ◽  
Price Performance ◽  
Long Run ◽  
Small Market

Share repurchases have become an increasingly popular method for companies to distribute cash to its shareholders as many countries have removed restrictions related to this activity. By using a new and unique data set with complete information of each repurchase program, the long-run share price performance following actual share repurchases and whether managers trade strategically are examined for a sample of Swedish firms. I find that the announcement effect surrounding the first repurchase date is small but that repurchasing firms on average outperform several benchmarks during the first three years and thereby exhibit superior information of the stock price. Evidence of strategic trading is documented in small market cap firms. Finally, I document that Swedish firms repurchase more in the first half compared to the second half of the program and also that a higher completion rate is associated with high abnormal return.

scholarly journals Long-run performance of initial public offerings in the German stock market: The family business experience 1977 to 1998

2007 ◽  
Vol 4 (4) ◽  
pp. 357-396
Author(s):  
Jan Kuklinski ◽  
Dirk Schiereck
Keyword(s):  
Initial Public Offerings ◽  
Firm Value ◽  
Stock Price ◽  
Family Firms ◽  
Equity Capital ◽  
Public Offerings ◽  
Price Performance ◽  
Long Run ◽  
Neuer Markt ◽  
The Impact

This paper investigates the long-run performance of initial public offerings of 174 family firms floated in Germany between 1977 and 1998. Family businesses typically come closest to the ideal of non- separation of ownership from control. The fundamental change in ownership structure induced by the flotation represents a change in the governance of the firm as for the first time dispersed outsiders buy equity capital. An examination of the stock price performance allows drawing conclusions to explain the impact of governance changes on firm value. A prediction of stock price performance spans two theories: Advantages of modern corporations where management and ownership are separated are cut short by the so-called principal-agent problem. Managers – the agents – could take actions against the interest of shareholders – the principals. Agency problems in closely-held family firms should be less predominant. On the other hand, the rent-protection theory predicts that family owners have incentives to skim private benefits at the expense of firm performance. Depending on the extent of these two effects, family-owned firms should out-, respectively underperform the market. The empirical evidence seems to support the private benefit hypothesis: 3 years after the listing the market-adjusted return was on average –25.31% compared to a broad index. The underperformance increased to –53.50% after 60 months. Even when excluding potential new economy and Neuer Markt biases, the underperformance is a statistically significant –10.50% and –50.13%, respectively.

scholarly journals A Baldrige Portfolio: Does Quality Outperform The Market?

2011 ◽  
Vol 1 (4) ◽  
Author(s):  
John A. Helmuth ◽  
Hei-Wai Lee
Keyword(s):  
Stock Price ◽  
Time Horizon ◽  
Risk Measurement ◽  
Press Releases ◽  
Price Performance ◽  
Long Run ◽  
National Quality ◽  
Quality Award ◽  
Department Of Commerce ◽  
National Quality Award

This paper investigates the claim, by the Department of Commerce, that a portfolio of Baldrige National Quality Award winners outperforms the market. They find that there is a 92 percent return for Baldrige winners as compared to a 33 percent return on the S&P 500 index. Their results are published and used to promote quality in Department of Commerce press releases. Our findings do not support their claim that investors can handsomely outperform the market by investing in a Baldrige portfolio. We find that their study is sensitive to risk measurement and that extending the time horizon alone eliminates any advantage. Our examination of long-run stock price performance of Baldrige firms also does not support their claim of outperforming the market.

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