6533b820fe1ef96bd127a332
RESEARCH PRODUCT
Investor Sentiment or Managerial Overconfidence: The Back Room of Acquisitions
José Emilio Farinós ViñasMiguel Angel Latorre GuillemBegoña Herrerosubject
OptimismFinancial economicsmedia_common.quotation_subjectTarget typeBusinessMarket sentimentMarket valueValuation (finance)Overconfidence effectmedia_commondescription
In this study, we investigate bidder performance (both in the short and the long term) in periods of high and low valuation market in response to announcements of acquisitions carried out by Spanish listed firms over the period 1991-2011. We provide evidence that bidder reaction to acquisitions, in both the short and the long term, is not consistent with the predictions of investor sentiment (optimism) after controlling for target type. However, our findings after controlling for bidder market-to-book ratio reveal under reaction in acquisitions of listed targets that is not independent of the market sentiment, since it is greater in hot periods. Finally, the results are not so consistent for unlisted targets in the long term.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2017-01-01 | SSRN Electronic Journal |