Who Writes the News? Corporate Press Releases during Merger Negotiations

Kenneth R. Ahern, Denis Sosyura

Research output: Contribution to journalArticle

104 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)241-291
Number of pages51
JournalJournal of Finance
Volume69
Issue number1
DOIs
StatePublished - Feb 1 2014
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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