An Empirical Analysis of Common Stock Delistings

Sanger, Gary C.; Peterson, James D.

doi:10.2307/2330828

Cited by 118 publications

(73 citation statements)

References 16 publications

(7 reference statements)

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…This paper uses time series daily data from the US market for a long period; however, annually accounting data is only available for a short period. Further 6 Floros [26] reports that volatility estimators based on opening, high, low and closing prices are efficient measures. Results from a simple regression of the form TGARCH(1,1), i.e.…”

Section: Discussionmentioning

confidence: 99%

“…Sanger and Peterson [6] and Macey et al [7] explain the liquidity hypothesis. In other words, the reduction in liquidity as well as the increase in liquidity risk is the main reasons for the negative effect of delisting on the stock price [8].…”

Section: Introductionmentioning

confidence: 99%

“…Sanger and Peterson [6] report a fall of about 8.5% in the stock price of delisting firms on the delisting announcement day. Further, Angel et al [10] find that the US investors experience a loss of about 22% in 60 days prior to delisting.…”

Section: Introductionmentioning

confidence: 99%

“…investors are neutral to these announcements. Table 3 reports the effect of joiners and leavers on the variance of returns (volatility) of the stock indices 6 . We find positive effect of leavers announcements on S & P500 volatility, while a negative effect of joiners announcements on DJIA volatility is reported.…”

mentioning

confidence: 99%

See 3 more Smart Citations

Accounting and Stock Market Performance in the US: Evidence from Joiners and Leavers

Floros¹,

Tabouratzi²,

Charamis³

et al. 2017

TEL

View full text Add to dashboard Cite

We consider recent data from three major US indices (S & P500, NASDAQ 100, and DJIA) to examine the effect of joiners and leavers on stock market returns and volatility. We report (a) a positive effect of leavers on stock market returns (S & P500, DJIA), (b) a positive effect of leavers on stock market volatility (S & P500), and (c) a negative effect of joiners on DJIA stock market returns and volatility. No effects reported for NASDAQ100. We compare these results with the profitability, P/E and Price to Book index ratios. These findings are recommended to financial managers and investors dealing with US stock indices.

show abstract

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

See 2 more Smart Citations

Accounting and Stock Market Performance in the US: Evidence from Joiners and Leavers

Floros¹,

Tabouratzi²,

Charamis³

et al. 2017

TEL

View full text Add to dashboard Cite

show abstract

“…The first one attempts to investigate the reasons that drive involuntary delistings of firms that are attributed to either the violation of the listing requirements or the poor financial performance (e.g, bankruptcy). Amongst the indicative literature we find the seminal paper by Sanger and Peterson (1990) (Thomsen and Vinten, 2014).…”

Section: Related Literature and Hypotheses Developmentmentioning

confidence: 99%

Wealth effects of delistings announcements in Europe

Δασίλας

Grose

Spyridis

2017

Investment Management and Financial Innovations

View full text Add to dashboard Cite

Using a European dataset of 478 delistings, the authors investigate the role of corporate governance in the short-term performance of European stocks around a delisting decision. In order to achieve this, the authors utilize the event study methodology in multiple contexts and cross-sectional regression analysis. This is particularly evident in high shareholder protection environments in a finding, related with investors' perception of the security they experience in the particular market, as well as the afterlife of the under delisting stock and the potential of value creation or destruction. In high investor protection environments the delisting event causes negative abnormal returns both for voluntary and involuntary delistings. The authors conjecture that these delistings, whether referring to LBOs, delistings from secondary listings or BOSOs, are strategic decisions, and in this respect pre-delisting shareholders acknowledge that there is life after delisting. Under low investor protection the above holds only for involuntary ones. Companies failing to meet capital market criteria and voluntary delistings appear to have significantly smaller losses than under bankruptcy firms, on average, on the eve of the delisting event. These abnormal returns are basically affected by the firms' financial soundness and the corporate governance level pertaining in the host market. Cross-sectional regression analysis shows also the inverse relationship between the degree of governance structures and market reaction to delistings announcements.

show abstract

Bibliography

2017

Location Strategies and Value Creation of International Mergers and Acquisitions

View full text Add to dashboard Cite

An Empirical Analysis of Common Stock Delistings

Cited by 118 publications

References 16 publications

Accounting and Stock Market Performance in the US: Evidence from Joiners and Leavers

Accounting and Stock Market Performance in the US: Evidence from Joiners and Leavers

Wealth effects of delistings announcements in Europe

Bibliography

Contact Info

Product

Resources

About