A Rose.Com by Any Other Name
23 Pages Posted: 17 Sep 2000
Date Written: November 2000
We document a striking positive stock price reaction to the announcement of corporate name changes to Internet related dotcom names. This "dotcom" effect produces cumulative abnormal returns on the order of 74% for the ten days surrounding the announcement day. The effect does not appear to be transitory; there is no evidence of a post announcement negative drift. The announcement day effect is also similar across all firms, regardless of the firm?s level of involvement with the Internet. A mere association with the Internet seems enough to provide a firm with a large and permanent value increase.
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