Open Access. Powered by Scholars. Published by Universities.®
- Keyword
-
- Institutional investors; corporate finance; corporate bankruptcy; stocks; organizational performance; stockholders; asset acquisitions; bankruptcies; bankrupt; net buyers (1)
- Mergers and acquisitions; mergers; acquisitions; Chapter 11 reorganizations; corporate bankruptcy; corporate finance; bankruptcy; distress (1)
Articles 1 - 2 of 2
Full-Text Articles in Accounting
Acquisitions Of Bankrupt And Distressed Firms, Elena Precourt, Henry Oppenheimer
Acquisitions Of Bankrupt And Distressed Firms, Elena Precourt, Henry Oppenheimer
Accounting Department Faculty Journal Articles
In this paper we focus on acquisitions of bankrupt firms and firms that recently emerged from Chapter 11 and compare these firms with acquired distressed firms to determine whether or not transaction timing plays a role in the outcomes of the mergers. We analyze deal premiums (or lack thereof) and evaluate post-merger operating cash flows to determine whether or not timing of the transactions impacts their effectiveness and success. We also evaluate targets and their acquirers’ stock price reactions to the announcements of acquisitions. We find that distressed targets sell their assets at a premium or at a discount smaller …
What Do Institutional Investors Know And Act On Before Almost Everyone Else: Evidence From Corporate Bankruptcies, Elena Precourt, Henry Oppenheimer
What Do Institutional Investors Know And Act On Before Almost Everyone Else: Evidence From Corporate Bankruptcies, Elena Precourt, Henry Oppenheimer
Accounting Department Faculty Journal Articles
We analyze investment behavior of institutional managers who hold and trade shares of firms that file for bankruptcy. We find that during the five-year period preceding a bankruptcy filing, institutional investors (except those managing investment companies) are net buyers with a positive abnormal net number of shares traded during the period. Institutional managers start to sell shares of bankrupt firms sooner in some firms than in others; these earlier sales are of smaller firms with weaker operating performance, and lower equity risk. We do not find evidence that institutional stockholders trade strategically and avoid material price declines before they occur.