Who Writes the News? Corporate Press Releases during Merger Negotiations
Year: 2013
Type: article
Abstract: ABSTRACT Firms have an incentive to manage media coverage to influence their stock prices during important corporate events. Using comprehensive data on media coverage and merger negotiations, we find that bidders in stock mergers originate substantially more news stories after the start of merger negotiations, but before the public announcement. This strategy generates a short‐lived run‐up in bidders' stock prices during the period when the stock exchange ratio is determined, which substantially impacts the takeover price. Our results demonstrate that the timing and content of financial media coverage may be biased by firms seeking to manipulate their stock price.
Source: The Journal of Finance
DOI: 10.1111/jofi.12109
Authors: KENNETH R. AHERN, DENIS SOSYURA
Institutions: University of Southern California, University of Michigan
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3042875708