RT Journal Article
SR Electronic
T1 Comprehensive Study of the Stock Market’s Reaction to Fairness Opinions
JF The Journal of Investing
FD Institutional Investor Journals
SP 75
OP 84
DO 10.3905/joi.2011.20.3.075
VO 20
IS 3
A1 Jocelyn Evans
A1 Lin Tan
A1 Weishen Wang
YR 2011
UL https://pm-research.com/content/20/3/75.abstract
AB The authors comprehensively study the stock market’s reaction to buy-side fairness opinions (FO) and investigate investment strategies associated with such opinions. They find that the stock portfolio of acquiring firms that purchase an FO for their merger deals has negative risk-adjusted abnormal returns and performs poorly relative to acquiring firms that undertake similar deals but do not use an FO. These results imply that for investment professionals, a more appropriate investment strategy is mostly to short the opinioned stocks.TOPICS: Security analysis and valuation, analysis of individual factors/risk premia