Short interest in mergers: anomalies in the overvaluation hypothesis

2018 ◽  
Vol 44 (8) ◽  
pp. 972-991 ◽  
Author(s):  
Sean M. Davis ◽  
Jeffrey M. Coy ◽  
Fernando Guillen Solis
Keyword(s):  
Longitudinal Data ◽  
Design Methodology ◽  
Short Selling ◽  
Share Price ◽  
Content Type ◽  
Acquiring Firms ◽  
Growing Body ◽  
Short Interest ◽  
Acquisition Likelihood ◽  
Interest Levels

Purpose High short interest is associated with overvaluation, and the purpose of this paper is to find contradictions to the commonly held “overvaluation hypothesis” when merger and acquisition (M&A) targets are examined. This paper extends the work of Ben-David et al. (2015), who confirm high short interest indicates overvaluation when focused on acquiring firms. Design/methodology/approach Short interest is examined as a predictor of acquisition likelihood using longitudinal data for US firms from 2003 to 2013. How short interest impacts the premiums paid by acquiring firms is examined with target, acquirer and deal characteristics. Findings M&A targets have high short interest and short interest increases acquisition likelihood, suggesting undervaluation. Highly shorted firms also experience outsized reductions in share price prior to merger announcements, and the premiums paid are also significantly predicted by short interest levels. Research limitations/implications Short selling activity can be motivated for reasons other than overvaluation, and many short positions can be held for long periods before they are closed, leading to high short interest levels for extended periods. Therefore, investors and researchers are cautioned that high short interest levels may exist in stocks that have already declined in price and could be poised for a reversal. Originality/value This study adds to the growing body of work indicating that short interest might not be the signal of overvaluation most researchers accept it to be.

Cold water swimming for well-being

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Billie Oliver
Keyword(s):  
Personal Experience ◽  
Design Methodology ◽  
Cold Water ◽  
Well Being ◽  
Research Literature ◽  
Content Type ◽  
Social Prescribing ◽  
Growing Body ◽  
Health And Well Being ◽  
Is Value

Purpose The purpose of this paper is to discuss the health and well-being benefits of outdoor, cold water swimming. Design/methodology/approach This paper describes the personal experience of one cold water swimmer. It also explores some of the research literature suggesting there is evidence of the benefits to the health and well-being of people of all ages. Findings The paper explores literature suggesting there is evidence of the benefits of “blue therapy” to the health and well-being of people of all ages. Originality This paper describes the personal experience of one cold water swimmer. However, a growing body of published literature suggests there is value in “blue therapy” informing future social prescribing programmes.

Muddying the waters: when does short selling become market manipulation?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Gregory Durston
Keyword(s):  
Design Methodology ◽  
Stock Exchange ◽  
Listed Company ◽  
Short Selling ◽  
Market Manipulation ◽  
London Stock Exchange ◽  
Content Type ◽  
High Court ◽  
Regulatory Actions

Purpose This paper aims to consider “spoofing”, “layering” and “short reports” in the context of market manipulation and, in particular, a recent controversy involving a short-selling attack on a major UK listed company that was considered by the High Court. Design/methodology/approach The very demanding legal and evidential prerequisites and practical difficulties, involved in bringing both criminal and regulatory actions in such cases are identified and discussed, as is the role of the Financial Conduct Authority. Findings These challenges help explain why so few actions of this type are brought. Originality/value This is the first paper to consider the implications of Burford Capital Limited v London Stock Exchange Plc [2020] EWHC 1183 (Comm).

Operating performance of acquirers after acquisition: evidence from India

2019 ◽  
Vol 12 (3) ◽  
pp. 327-341
Author(s):  
Bipin Kumar Dixit
Keyword(s):  
Design Methodology ◽  
Operating Performance ◽  
Difference In Difference ◽  
Return On Assets ◽  
Content Type ◽  
Acquisition Period ◽  
Acquiring Firms ◽  
Book To Market Ratio ◽  
Matching Criteria ◽  
And Control

Purpose The purpose of this paper is to examine the operating performance of Indian using difference-in-difference (DD) methodology. It, further, examines whether there is a difference in the operating performance of acquirers doing partial and full acquisitions. Design/methodology/approach Four different benchmark criteria are used to select control firms, namely, size, size and industry, size and leverage, and size and book-to-market ratio. To measure the operating performance, return on assets (ROA) is calculated as the ratio between earnings before depreciation, interest, tax and amortization (EBDITA) and total assets (TA), expressed in percentage. This paper examines the ROA of event and control firms for three years in each pre- and post-acquisition period and finally compares them using the DD method. Findings Using a sample of Indian acquirers, the results show that the operating performance of Indian acquirers neither improves nor deteriorates after accounting for an appropriate benchmark. Operating performance of event firms significantly reduces in the post-acquisition period. However, non-acquiring firms of similar size and pre-operating performance also exhibit similar results. Finally results show that, the operating performance of acquirers making full acquisitions deteriorates. Originality/value It provides insights into the operating performance of Indian acquirers with an improved methodology, which accounts for the performance of control firms. The author also uses multiple matching criteria to find control firms to overcome the possible bias of the results dependent on the matching criteria. To the best of the author’s knowledge, the author could not find other studies comparing the operating performance of acquirers making partial and full acquisitions.

Consumers’ reactions to cross-border acquisitions

2019 ◽  
Vol 122 (2) ◽  
pp. 655-677
Author(s):  
Riccardo Resciniti ◽  
Michela Matarazzo ◽  
Gabriele Baima
Keyword(s):  
Experimental Design ◽  
Corporate Reputation ◽  
Design Methodology ◽  
Consumer Perceptions ◽  
Psychic Distance ◽  
Target Firm ◽  
Content Type ◽  
Cross Border ◽  
Acquiring Firms

Purpose The purpose of this paper is to focus on consumers’ reactions to cross-border acquisitions (CBA) by exploring the role of consumer perceptions of the psychic distance between the country of the acquirer and that of the target firm when the acquiring corporation has a good or poor reputation. Design/methodology/approach A 2×2 experimental design which manipulated psychic distance and acquirer’s corporate reputation was conducted in Italy. The study considers an Italian food target firm and compares four foreign acquiring firms with different combinations of corporate reputation (good/poor) and psychic distance to Italy (small/large). Findings The authors found that the degree of psychic distance between the countries of the acquiring and targeted firms was inversely related to Italian consumers’ intentions to repurchase the products of the post-acquisition target, and unrelated to the acquirer’s corporate reputation. Originality/value This is the first study focusing on psychic distance in the context of CBA, especially from the perspective of consumer behavior, which can help to better understand certain negative reactions toward the acquisition of a business.

Leadership networks in destinations

2014 ◽  
Vol 69 (1) ◽  
pp. 59-73 ◽  
Author(s):  
Anita Zehrer ◽  
Frieda Raich ◽  
Hubert Siller ◽  
Franz Tschiderer
Keyword(s):  
Design Methodology ◽  
Dynamic Behaviour ◽  
Relevant Literature ◽  
Strategic Orientation ◽  
Innovation Capability ◽  
Tourism Destination ◽  
Content Type ◽  
Network Characteristics ◽  
Growing Body ◽  
Tourism Destinations

Purpose – Co-operation activities play a central role for the development of a tourism destination, and require a co-operative approach among numerous different actors to manage and market a tourism destination. This paper aims to describe the characteristics of leadership networks in tourism destinations and their impact on destination development. Design/methodology/approach – The paper discusses network relationships of destination leaders, as in their collectivity, leaders shape and influence the destination's core services, strategic orientation and innovation capability. The research is based on the examination of relevant literature and a quantitative survey conducted in five selected tourism destinations in the Tirol, Austria. Findings – The article discusses leadership networks in community-structured destinations, providing insights into its organizational structure and dynamic behaviour. Moreover, the paper illustrates the network characteristics and its influence on the development of the tourism destination. Thus, implications for destination management can be derived. Originality/value – Discussions on leadership have usually been limited to firms and have not yet fully embraced the network and destination level. The originality of the paper is to provide insights in destination leadership and networking activities of leaders within destinations by means of a quantitative approach and thus adds to the growing body of literature on the functionalities of destination leadership networks, their structures and mechanisms.

Accounting irregularities and failure to deliver

2014 ◽  
Vol 40 (8) ◽  
pp. 770-786 ◽  
Author(s):  
Naomi E. Boyd ◽  
Ann Marie Hibbert ◽  
Ivelina Pavlova
Keyword(s):  
Design Methodology ◽  
Institutional Ownership ◽  
Short Selling ◽  
Accounting Restatements ◽  
Content Type ◽  
Short Sellers ◽  
Naked Short Selling ◽  
The Relationship

Purpose – The purpose of this paper is to examine the relationship between naked short selling and accounting irregularities that cause a firm to issue a restatement. Design/methodology/approach – Using the level of abnormal fails-to-deliver as a proxy for naked short selling, the paper looks for evidence of increased naked short selling in anticipation of, as well as in response to these announcements. Findings – Larger firms and firms with a higher percentage of institutional ownership experience greater levels of fails prior to the announcement day, while smaller firms are more likely to be targets of naked short sellers after the announcement. The paper also finds that more transparent announcements are associated with more abnormal fails. Originality/value – This paper is the first research to study the relation between naked short selling and accounting restatements.

Popular music in Super Bowl commercials 2005-2014

2016 ◽  
Vol 17 (4) ◽  
pp. 333-348 ◽  
Author(s):  
David Allan ◽  
Stephanie A. Tryce
Keyword(s):  
Content Analysis ◽  
Popular Music ◽  
Design Methodology ◽  
Product Category ◽  
Future Research ◽  
Advertising Research ◽  
Super Bowl ◽  
Content Type ◽  
Growing Body ◽  
Song Lyrics

Purpose The purpose of this paper is to quantify and qualify the commercials in the Super Bowl. Design/methodology/approach This study is a content analysis of the placement of popular music in Super Bowl advertisements over a ten-year period (2005-2014). Findings More than a quarter of the commercials analyzed contained popular music. Although the use of popular music in commercials vacillated from year to year, popular music was most often observed in the product category of beverages; the music treatment most often used was original vocals; and song lyrics were most often relevant to the narrative of the commercial, rather than the brand. Originality/value This study extends the growing body of Super Bowl advertising research to popular music in commercials and provides a benchmark for all future research in this area.

Share price response to the SEC administrative proceedings against Chinese auditors

2019 ◽  
Vol 34 (9) ◽  
pp. 1131-1148
Author(s):  
Guoping Liu ◽  
Jerry Sun
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Share Price ◽  
Accounting Firms ◽  
Content Type ◽  
Share Prices ◽  
Audit Failure ◽  
Price Response ◽  
Chinese Auditors ◽  
Administrative Proceedings

Purpose The purpose of this study is to examines whether clients’ share prices responded to three events, including the Securities and Exchange Commission (SEC) launch of administrative proceedings against five Chinese accounting firms on December 3, 2012, for their failure to hand over audit work papers due to conflict of jurisdiction; the issuance of SEC Administrative Law Judge Elliot’s ruling on January 22, 2014; and the settlement of the administrative proceedings on February 6, 2015. Design/methodology/approach This study uses the Schipper and Thompson approach. Findings It is found that share prices responded negatively around December 3, 2012, for USA-listed Chinese companies who were audited by Chinese auditors. Originality/value This study provides evidence on how share prices reacted to SEC enforcement actions against an affair of non-audit failure.

Success and succession planning

2020 ◽  
Vol 36 (8) ◽  
pp. 37-39
Keyword(s):  
Case Studies ◽  
Succession Planning ◽  
Design Methodology ◽  
Reading Time ◽  
Press Release ◽  
Share Price ◽  
Content Type ◽  
The Real ◽  
Pertinent Information ◽  
Practical Implications

Purpose This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Design/methodology/approach Reviews the latest management developments across the globe and pinpoints practical implications from cutting-edge research and case studies. Findings Why do firms change their boss? There, of course, numerous reasons why this happens, and almost none of them are admitted publicly when it happens. Some bosses are there today, and then gone tomorrow, and while the hastily issued press release from the firm in question cites a desire for the previous incumbent to spend more time with their family, this is usually code for ‘he was fired.’ Other bosses may leave more publicly, but the real reasons remain buried – although consecutive sets of poor financial results and a spiraling share price usually point to the real reasons. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Hip children, good mothers – children’s clothing as capital investment?

2019 ◽  
Vol 20 (3) ◽  
pp. 153-166 ◽  
Author(s):  
Erica Åberg ◽  
Jarna Huvila
Keyword(s):  
Consumer Culture ◽  
Capital Investment ◽  
Design Methodology ◽  
Physical Appearance ◽  
Extended Self ◽  
Content Type ◽  
Novel Approach ◽  
Sociological Literature ◽  
Growing Body ◽  
Class Context

Purpose A growing body of sociological literature defines physical appearance as a form of capital, a convertible resource in contemporary societies. The purpose of this study is to examine the importance of consuming on children’s fashion as a part of this appearance-oriented consumer culture. We investigate if the mothers we interviewed see their children as their extended self and actually are negotiating their own aesthetic capital through their children’s clothing. Design/methodology/approach In this study, we utilise 10 semi-structured themed interviews with Finnish mothers who were recruited from a popular Facebook group, focused on discussing children’s fashion. Findings Results indicate that women see their children as their extended self, and as such, they can be seen negotiating their own aesthetic capital through consuming practices for their children. Additionally, the investment in the physical appearance of children can be seen as a construction of a contemporary understanding of proper motherhood in the middle-class context. Originality/value Although extensive research has been carried out in expenditure on children’s fashion, this research offers a novel approach by combining research on parenting in a consumer culture with the theory of aesthetic capital to explore the materially based construction of parenting in the Finnish context.

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