Business Commons^™

Ai-Nvesting: An Empirical Analysis With Sector Categorization And Prompt Complexity Considerations Assessing The Predictive Power Of Chatgpt In Stock Market Forecasting, Ian J. Larson

CMC Senior Theses

Abstract

This paper investigates whether ChatGPT has any predictive power when it comes to the stock market. Since its public release in December 2022, OpenAI’s ChatGPT has become a popular tool for millions of users across the world. With new use cases being found every day, I explore whether the system has any utility at predicting where stock prices will go. Using a 10-year study window, I prompt ChatGPT to give U.S. equity picks on a one-year holding period basis, segregating its picks into 3 different category sizes across 8 directed prompts. I examine the 24 equal weight portfolios of …

The Impact Of Wars On Us Defense Stock Returns, Viksit Verma

CMC Senior Theses

This thesis examines the financial performance and market impact of defense and aerospace companies during periods of war and conflict. The study examines a sample of 9 firms representing the defense sector, and utilizes an event study methodology to assess stock returns during specific geopolitical events, namely the Russia-Ukraine War and the Israel-Hamas conflict. The study generally reveals positive abnormal returns during conflicts, indicating lower volatility and reduced market risk for the sample of defense firms compared to the broader market. All abnormal returns are statistically significant for the Russia-Ukraine War. For the Israel-Hamas conflict, abnormal returns for 4 out …

Activism Aftershocks: Looking Beyond The Short-Term Stock Surges Caused By Activist Hedge Fund Campaign Announcements, Zara Vakath

CMC Senior Theses

It is well known that firms targeted by activist hedge funds experience positive abnormal stock returns during the campaign announcement window. However, the link between these short-term returns and the impact to long-term target firm performance has not been established. In this study, I find essentially no link between the positive announcement window returns and long-term performance improvements, using a variety of different methods. I examine performance changes over time and also relative to a matched sample of firms that have not been targeted by activist hedge funds. Additionally, I assess the correlation between the magnitude of short-term abnormal stock …

Spac Success Factors: Determinants Of Post-Acquisition Share Price Growth, Cade Moffatt

CMC Senior Theses

This paper examines characteristics of Special Purpose Acquisition Companies (SPACs) as determinants of post-acquisition success. I collected data on all SPACs which merged with a target firm between 2016 and the start of 2021. The data set controls for a host of variables including the contractual design of the SPAC, management team characteristics, founder compensation structure, key underwriter data, and performance metrics measured throughout the SPAC’s lifecycle. Using a multivariable regression, I find new and robust insights into the SPAC market. Contrary to current literature, I conclude that the misaligned incentives caused by the initial at-risk capital supplied by founders …