Patterns in the timing of corporate event waves

P. Raghavendra Rau*, Aristotelis STOURAITIS

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    36 Citations (Scopus)

    Abstract

    Corporate events happen in waves. In this paper, we examine the timing patterns of 5 different types of corporate event waves (new stock and seasoned equity issues, stock- and cash-financed acquisitions, and stock repurchases) using a comprehensive data set of more than 151,000 corporate transactions over the 25-year period from 1980 to 2004. We document a distinctive pattern, previously not found in the literature, in the way stock-related waves form. Corporate waves seem to start with new issue waves (seasoned equity offering preceding initial public offering waves), followed by stock-financed merger waves, followed in turn by repurchase waves. Our results hold over separate decades and across industries. Our results seem consistent with both the neoclassical efficiency hypothesis and the misvaluation hypothesis, and there are distinct periods when one or the other appears dominant.

    Original languageEnglish
    Pages (from-to)209-246
    Number of pages38
    JournalJournal of Financial and Quantitative Analysis
    Volume46
    Issue number1
    DOIs
    Publication statusPublished - Feb 2011

    Scopus Subject Areas

    • Accounting
    • Finance
    • Economics and Econometrics

    Fingerprint

    Dive into the research topics of 'Patterns in the timing of corporate event waves'. Together they form a unique fingerprint.

    Cite this