Debt, Equity, and Information

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The effect of bidder conservatism on M&A decisions: text-based evidence from US 10-K filings

This paper examines whether and how bidders' conservative tone in 10-K filings influences the subsequent mergers and acquisitions (M&A) investment decisions of these US firms from 1996 to 2013. Based on 39,260 firm-year observations, we find, consistent with behavioural consistency theory, that conservative bidders are less likely to engage in M&A deals. Further, those that decide to engage in M&As are likely to acquire public targets and within-industry firms. These bidders are inclined to employ more stock acquisitions than cash acquisitions. Our results also indicate that conservative bidders experience abnormally poor stock returns around the announcements of M&A investments. This provides new insights on the mechanism through which bidders' sentiments influence shareholders' wealth. Overall, these findings highlight the implications of the textual sentiment of corporate disclosure for the forecasting of corporate investment and financing decisions. Our results have practical implications, since they shed light on the value relevance of the information content of major Securities Exchange Commission (SEC)-mandated 10-K filings

The role of media in takeovers: theory and evidence

Conference Theme: Frontiers in Finance: Asia-Pacific and BeyondSession 1: Junior Faculty Workshop (Corporate Finance I): no. 4The 2011 Annual Conference of the Asian Finance Association (AsianFA), Macao, China, 10-13 July 2011

Debt, equity, and information

Session: Contracts and Fiscal PolicyThe 10th Conference of the Society for the Advancement of Economic Theory (SAET), Singapore, 14 August 2010

Vanguards and Violence: Representations of Female Armed Resistance and the Search for Radical Legitimacy, 1968-1975

The year 1968 marked the turning point from the nonviolent direct action characterized by Martin Luther King, Jr. during the civil rights movement to the militant violence of the Weather Underground Organization (WUO) and other clandestine organizations in America. Disillusionment with the US political system, coupled with the increased police brutality and repression against people of color and anti-war demonstrators, cemented the need for new, militant organizing tactics for many in the New Left. Numerous white, middle-class individuals turned toward militant action and found opportunities to challenge their white privilege and fight against imperialism in clandestine organizations such as the WUO, Symbionese Liberation Army (SLA), and New World Liberation Front (NWLF). Using the increase in armed actions against the state by clandestine organizations as its focus, this thesis utilizes a cultural history approach to illuminate the convergences of race, class, and gender in constructing an authentic and legitimate revolutionary identity for white, middle-class women, exposing the meaning of violence for revolutionary radicals. This thesis argues that, due to the social stigma attached to the performance of violence by white women of good upbringing, these women in clandestine organizations borrowed from marginalized groups they deemed authentic revolutionaries, established a usable past to familiarize themselves with revolutionary activism and armed struggle, and relied heavily on Third World models of revolutionary women

Media-Based Merger Arbitrage

Conference Theme: Risk and Investor BehaviorsAcademic Session13: Corporate Finance

Slow-Moving Real Information in Merger Arbitrage

Parallel Session: Text AnalysisThe Abstract and the Content of the conference paper can be viewed at: https://www.conftool.com/efa2014/index.php?page=browseSessions&search=Slow-Moving+Information+in+Merger+ArbitrageWe analyze a large sample of merger announcements to characterize information flows in merger arbitrage. Despite attempts to manipulate information, it is possible for merger arbitrageurs to extract fundamental information from the financial media. This information moves slowly and it takes several days to become fully absorbed in stock prices. A simple merger arbitrage strategy based on media content increases risk-adjusted returns by more than 12 percentage points

Looking for risk in words: a narrative approach to measuring the pricing implications of financial constraints

Simon School Working Paper No. FR 14-11We construct a novel measure of financial constraints using textual analysis and investigate its impact on stock returns. Unlike other financial constraints measures, ours is consistent with firm characteristics of constrained firms. We find that constrained firms' returns move together. The variation of a financial constraints factor cannot be explained by the Fama-French and momentum factors, earning an annualized risk-adjusted excess return of 7%. A stock trading strategy based on financial constraints is most profitable for large and liquid stocks, and when the financial constraints are measured by access to debt markets instead of equity markets.link_to_OA_fulltex