Abstract

http://ssrn.com/abstract=2144552
 
 

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Derivatives Trading and Negative Voting


Holger Spamann


Harvard Law School

September 10, 2012

Harvard Law, Economics, and Business Discussion Paper No. 730

Abstract:     
This paper exposits a model of parallel trading of corporate securities (shares, bonds) and derivatives in which a large trader can sometimes profitably acquire securities with their corporate control rights for the sole purpose of reducing the corporations value and gaining on a net short position created through off-setting derivatives. At other times, the large trader profitably takes a net long position. The large trader requires no private information beyond its own trades. The problem is most likely to manifest when derivatives trade on an exchange and transactions give blocking powers to small minorities, particularly out-of-bankruptcy restructurings and freezeouts.

Number of Pages in PDF File: 25

JEL Classification: G34, K22

working papers series


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Date posted: September 11, 2012  

Suggested Citation

Spamann, Holger, Derivatives Trading and Negative Voting (September 10, 2012). Harvard Law, Economics, and Business Discussion Paper No. 730. Available at SSRN: http://ssrn.com/abstract=2144552 or http://dx.doi.org/10.2139/ssrn.2144552

Contact Information

Holger Spamann (Contact Author)
Harvard Law School ( email )
Cambridge, MA 02138
United States
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