No abstract

Reverse mergers, Takeovers, G34,

Conclusions regarding analyst performance often depend on the evaluation technique employed. Using a wide variety of techniques, wefind that although there is some evi- dence that analysts do have the ability to identify undervalued and overvalued securities, individual investors generally experience inferior portfolio performance by following analyst recommendations published in the ‘Market Highlights” section of USA Today (even before transaction costs are included). Asaresult,individualinvestorsshouldview studies thatpurport to show superior performance with skepticism. This statement is partitularly true when the assertions are based on stock index comparisons.

An acquiring firm's strategic objective and post-acquisition stock price performance are determined, at least in part, by the industry's outlook and structure, and by the acquiring firm's market position. Acquiring-firm managers are more likely to acquire a related target firm when the industry outlook is favourable, the four-firm concentration ratio is low, and the firm is a major competitor. Related acquisitions by industry leaders are the most successful in terms of increasing acquiring-firm shareholder wealth. However, we find no evidence that acquiring firms systematically gain a competitive advantage over rival firms, when the rival firms are classified by size and competitive position.

No abstract