Abstract

http://ssrn.com/abstract=1570530
 
 

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Who Writes the News? Corporate Press Releases During Merger Negotiations


Kenneth R. Ahern


University of Southern California - Marshall School of Business

Denis Sosyura


University of Michigan, Stephen M. Ross School of Business

January 28, 2014

Journal of Finance, Vol. 69, No. 1, 2014

Abstract:     
Firms have an incentive to manage media coverage to influence their stock price 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.

Number of Pages in PDF File: 98

Keywords: role of media in finance, media coverage, news, press releases, mergers, negotiation

JEL Classification: G14, G34

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Date posted: March 16, 2010 ; Last revised: January 29, 2014

Suggested Citation

Ahern, Kenneth R. and Sosyura, Denis, Who Writes the News? Corporate Press Releases During Merger Negotiations (January 28, 2014). Journal of Finance, Vol. 69, No. 1, 2014. Available at SSRN: http://ssrn.com/abstract=1570530 or http://dx.doi.org/10.2139/ssrn.1570530

Contact Information

Kenneth Robinson Ahern (Contact Author)
University of Southern California - Marshall School of Business ( email )
701 Exposition Blvd
Los Angeles, CA 90089
United States
HOME PAGE: http://www-bcf.usc.edu/~kahern/
Denis Sosyura
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
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