Weaponized disclosure : the feedback effect of disclosure externalities
Name
1006378585-MIT.pdf
Description
Full printable version
Size
4.87 MB
Format
Adobe PDF
Checksum (MD5)
1c866959d91f0f33486a809b340becf3
Author(s)
Kim, Jinhwan
Advisor(s)
Rodrigo S. Verdi and Eric C. So.
Alternative Title
Feedback effect of disclosure externalities
Date Issued
2017
Publisher
Massachusetts Institute of Technology
Abstract
Information about one firm has the potential to affect the stock price of another firm. I investigate whether managers recognize this potential and strategically alter their disclosure decisions when doing so is beneficial. Using data on media coverage and merger negotiations, I find that bidders in all-cash mergers originate substantially more negatively (positively)-charged press release articles when the bidders' disclosure content is expected to positively (negatively) co-vary with the targets' value during merger negotiations. This strategy generates a short-lived walk-down in the targets' stock prices during the period when the targets' takeover price is determined, which substantially increases the relative wealth gains realized by bidders. My results demonstrate that the timing and content of disclosures may be biased by firms seeking to manipulate the stock prices of other firms.
Description
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, 2017.
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 32-34).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
Terms of Use
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