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Predictive Power? Textual Analysis In Mergers & Acquisitions, Philip E. Morgan
Predictive Power? Textual Analysis In Mergers & Acquisitions, Philip E. Morgan
Marriott Student Review
Modern corporations utilize mergers and acquisitions as strategies to develop shareholder value today more than ever before, yet the need for understanding firms’ rationale and strategy is critical in predicting post-merger stock performance for all investors. I apply the interpretive power of textual analysis and regression to a corpus of SEC mergers and acquisitions public company filings between 1994-2017. Not only do I challenge the statistically significant correlation between word content and post-transaction abnormal stock returns, but I also characterize the effects of time segments, transaction size, and industry variation across time. As a final application, I consider sentiment analysis …