Research

Publications

The Intangibles Song in Takeover Announcements: Good Tempo, Hollow Tune, with Alexander F. Wagner

Review of Financial Studies, forthcoming

Mergers and acquisitions are often motivated by the intention of creating value from intangible assets. We develop a word list of intangibles and apply it to takeover announcements. One standard deviation more in intangible-related language (“intangibles talk”) lowers announcement returns for the acquirer by 0.50 percentage points, and predicts worse operating performance. Bidder managers appear to believe in the deals nonetheless, as evidenced by insider trades, payment choices, and completion probabilities and speed. Overall, takeover announcement texts reveal important information regarding hard-to-measure aspects of deal quality.

Working Papers

Beyond the hype: Understanding IPO (over)valuation, with B. Seistrajkova (submitted)

 IPOs frequently exhibit substantial price gains, which tend to diminish over time. We examine this phenomenon by focusing on the behavior of sophisticated and well-informed market participants, specifically short sellers and stock analysts. Our findings suggest that first-day closing prices often exceed fundamental values, driven by attention and sentiment-fueled buying pressure. Short sellers exploit these valuation distortions, likely at the expense of optimistic individual investors. Subsequently, analysts issue relatively conservative initial stock recommendations, contributing to a long-term decline in stock prices. Overall, waiting for post-IPO enthusiasm to subside may help investors avoid the overvaluation inherent in newly listed stocks.

Strategic M&A Announcement Timing: Evidence from Merger Monday

Drawing on the day of the week pattern of mergers and acquisitions, I investigate whether managers engage in strategic announcement timing, and if so, whether such a decision pays off. The findings are consistent with managers timing M&A announcements as they seek to avoid the anticipated unfavorable market reaction. I document that this strategy is related to higher stock returns when managers attempt to avoid periods of low investor attention. However, the analysis reveals no evidence of significant gains when the managerial decisive factor is the possibility that the market might interpret the announcement as bad news. Furthermore, I find that strategic timing and negotiation complexity help explain the prevalence of merger announcements on Mondays (the Merger Monday phenomenon) and its flip side, a low percentage of M&A announcements on Friday.

Work in Progress

To treat or prevent pollution?, with C. Gentet-Raskopf (recently joined the project)

The paper examines whether and to what extent financial constraints play a role in situations where manufacturing firms must decide between investing in pollution prevention or pollution treatment.

M&As and firm complexity

The aim of this study is to deliver a comprehensive analysis of how firm and deal complexity impact M&A performance.

Stock markets and geopolitical risk, with W. Faris

The study is focused on understanding whether and how stock markets comprehend geopolitical risks when there is a high level of uncertainty.

Individual manager performance and gender diversity in the private equity industry, with S. Ain Tomar

Using unique data on private equity (PE) fund managers, the objective of this research is to understand the relation between managers' gender diversity and fund performance.

Firm life cycle and IPO returns, with J. Tresl

We analyze the effect of firm life cycle stages on the first-day IPO returns.