Sean M. Davis, Jeffrey M. Coy and Fernando Guillen Solis
High short interest is associated with overvaluation, and the purpose of this paper is to find contradictions to the commonly held “overvaluation hypothesis” when merger and…
Abstract
Purpose
High short interest is associated with overvaluation, and the purpose of this paper is to find contradictions to the commonly held “overvaluation hypothesis” when merger and acquisition (M&A) targets are examined. This paper extends the work of Ben-David et al. (2015), who confirm high short interest indicates overvaluation when focused on acquiring firms.
Design/methodology/approach
Short interest is examined as a predictor of acquisition likelihood using longitudinal data for US firms from 2003 to 2013. How short interest impacts the premiums paid by acquiring firms is examined with target, acquirer and deal characteristics.
Findings
M&A targets have high short interest and short interest increases acquisition likelihood, suggesting undervaluation. Highly shorted firms also experience outsized reductions in share price prior to merger announcements, and the premiums paid are also significantly predicted by short interest levels.
Research limitations/implications
Short selling activity can be motivated for reasons other than overvaluation, and many short positions can be held for long periods before they are closed, leading to high short interest levels for extended periods. Therefore, investors and researchers are cautioned that high short interest levels may exist in stocks that have already declined in price and could be poised for a reversal.
Originality/value
This study adds to the growing body of work indicating that short interest might not be the signal of overvaluation most researchers accept it to be.
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Garrett C.C. Smith and Jeffrey M. Coy
The purpose of this study is to compare two theories that relate the proportion of diversified firms in the economy and the implied discount for diversified firms: the first is a…
Abstract
Purpose
The purpose of this study is to compare two theories that relate the proportion of diversified firms in the economy and the implied discount for diversified firms: the first is a real-options model predicting a positive relationship between the discount and management’s choice to operate a diversified firm; the second is based on catering theory, in which a negative relationship is predicted, as management is attentive to investor preference concerning diversified firms.
Design/methodology/approach
This study proposes a new aggregate measure of the diversification discount. The authors’ measure allows for decomposition of the discount into firm-level mispricing, industry-level mispricing and long-run fundamental value components.
Findings
Results support a catering theory of diversification. The discount appears to be the result of firm-level mispricing. Thus, providing an explanation for why, in light of the observed discount, a large number of diversified firms persist.
Originality/value
To the authors’ knowledge, this is the first study to provide evidence that firm-level mispricing may drive the observed diversification discount.
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Jeffrey M. Coy, Kien D. Cao and Thuy T. Nguyen
Consistent with an “absolute bonding hypothesis,” the benefits of listing on US exchanges experienced by cross-listed firms are accompanied by an increased risk of experiencing a…
Abstract
Purpose
Consistent with an “absolute bonding hypothesis,” the benefits of listing on US exchanges experienced by cross-listed firms are accompanied by an increased risk of experiencing a spillover effect due to negative news within their industry. The purpose of this study is to test this form of the bonding hypothesis by analyzing the spillover effect to cross-listed firms when class action lawsuits are filed against their industry peers.
Design/methodology/approach
The bonding hypothesis is tested by analyzing the spillover effect to non-sued cross-listed firms of class action lawsuits brought against US domestic firms in the same industry. The spillover effect is identified using cumulative abnormal returns around lawsuit filing dates from 1996 to 2020. A sample of matched non-sued cross-listed and domestic peer firms is evaluated in a cross-sectional analysis to identify country and firm-level characteristics that mitigate the negative spillover effect to cross-listed firms.
Findings
While US firms realize significantly negative abnormal returns when class action suits are filed against their industry peers, the impact to cross-listed peers is statistically insignificant. In multivariate analyses, we show that the ability of cross-listed firms to avoid this negative spillover effect is stronger for firms with greater profitability that are headquartered in countries with better shareholder protections and governance characteristics.
Originality/value
Results suggest that cross-listed firms may have a level of immunization from the negative industry spillover effect of class action lawsuits and, thus, exhibit only “partial bonding” to the US market.
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Charlotte Ryan and Gregory Squires
We argue that by conducting systematic research with communities rather than on communities, community-based research (CBR) methods can both advance the study of human interaction…
Abstract
We argue that by conducting systematic research with communities rather than on communities, community-based research (CBR) methods can both advance the study of human interaction and strengthen public understanding and appreciation of social sciences. CBR, among other methods, can also address social scientists’ ethical and social commitments. We recap the history of calls by leading sociologists for rigorous, empirical, community-engaged research. We introduce CBR methods as empirically grounded methods for conducting social research with social actors. We define terms and describe the range of methods that we include in the umbrella term, “community-based research.” After providing exemplars of community-based research, we review CBR’s advantages and challenges. We, next, summarize an intervention that we undertook as members of the Publication Committee of the URBAN Research Network’s Sociology section in which the committee developed and disseminated guidelines for peer review of community-based research. We also share initial responses from journal editors. In the conclusion, we revisit the potential of community-based research and note the consequences of neglecting community-based research traditions.
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Erik A. Dalmasso, Jeffrey P. Bakken, T. Scott Estes and Quentin M. Wherfel
Technology has become a very important aspect of our sacred existence as humans. It has penetrated all sections of our society – it is now an enrichment tool for our economy…
Abstract
Technology has become a very important aspect of our sacred existence as humans. It has penetrated all sections of our society – it is now an enrichment tool for our economy, politics, education, and society. While these enrichments are naturally inclusive, this chapter focuses on the use of technology in enhancing the education of students, especially those with disabilities. Things that were once inaccessible are now accessible to students with disabilities through the use of technology. These students might have some atypical traits; however, they are humans who can learn and function in our society when provided with appropriate learning tools such as technology. With technology, these students' learning and social activities can be enhanced, modified, adapted, and adjusted so that they can maximize their fullest potential. This is the premise of this chapter; and it sets the stage for the other chapters.
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Victoria Rodner, Amy Goode and Zara Burns
To better understand the uptake of cosmetic procedures in the wake of Instagram, this study aims to unravel how the aesthetic labour of influencers acts as the packaging of the…
Abstract
Purpose
To better understand the uptake of cosmetic procedures in the wake of Instagram, this study aims to unravel how the aesthetic labour of influencers acts as the packaging of the cosmetic servicescape. In doing so, the authors contribute to theorising of aesthetic and emotional labour within the services marketing literature, fleshing out the bodywork of influential others not as employees but endorsers, who act like the “walking billboards” (Zeithaml and Bitner, 2003) for the cosmetic service industry.
Design/methodology/approach
This study adopts a dual qualitative approach to data collection, coupling netnographic material from Instagram posts with 16 in-depth interviews with female Instagram users who have undergone or hope to undergo cosmetic surgery. Using mediated discourse analysis, the authors weave their visual and discursive data together for a richer account of the commoditisation of cosmetic surgery.
Findings
Adopting a postfeminist neoliberal lens, where women are viewed as aesthetic entrepreneurs who are constantly working on the body and the self, the findings of the study reveal how influencers’ aesthetic and emotional labour help package, propagate and demystify the cosmetic servicescape. Through their visual storytelling, we see how influencers help endorse (local) cosmetic services; commoditise cosmetic procedures through the conspicuous display of their ongoing body projects whilst masking the labour and pain involved; and how face-filters that use augmented reality (AR) technology foster new forms of (digitised) body dysmorphia.
Originality/value
The authors shed light on the darker side of social media and body-enhancing technologies, where tales of body transformation trivialise cosmetic intervention and AR technology induces a digitised body dysmorphia.
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In this chapter, I examine how religion can serve as an ideology that has the capacity to bridge people of the same faith who hold divergent political stances. Building on…
Abstract
In this chapter, I examine how religion can serve as an ideology that has the capacity to bridge people of the same faith who hold divergent political stances. Building on Williams’ work (1996), I propose that religion operates as an ideology when it diagnoses the source of social conflicts, proposes solutions, and justifies action. Yet religious ideological appeals are not always effective at bridging political divides. Thus the key question of this study is: under what social conditions are religiously-based ideological appeals effective at winning people’s support for social and political movements? To address this, I examine the relationship of religious leaders to Latin American movements that aimed to nonviolently overthrow authoritarian states. In particular, I analyze the conditions that led some religious elites to become pro-revolution while others sided with the incumbent regime. Using comparative historical methods, I analyze the different political stances of the Catholic Church hierarchy in the 1970s–1980s in Chile (where the church opposed the dictatorship), Argentina (where the church was largely supportive of the regime), and El Salvador (where the church hierarchy was divided). I argue that ideological appeals for religious leaders’ support are most effective when the religious institution receives no financial or political benefits from the regime and when leaders have relational ties to the aggrieved. Two factors had mixed effects on the decision to remain loyal to the state or not; these include the presence of an armed radical flank, and the state’s use of indiscriminate repression.
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In recent years, the Internet has increasingly served as an important tactical tool for protest campaigns, arguably contributing to a restructuring of the repertoire of…
Abstract
In recent years, the Internet has increasingly served as an important tactical tool for protest campaigns, arguably contributing to a restructuring of the repertoire of contention. This study analyzes a recent case of Internet-backed activism, focusing on the ongoing transnational mobilization against the Free Trade Area of the America's (FTAA) initiative. The Hemispheric Social Alliance, a coalition of hundreds of civil society organizations across the Western hemisphere opposed to the free market underpinnings of the FTAA, has employed Internet technologies to communicate, strategize, educate and pressure state authorities in an effort to promote an alternative social-developmental vision. This case of transnational contention has important implications that go beyond the Americas context. The organization of groups transnationally, combined with Internet communication and coordination strategies, suggests that popular political protest has begun to look considerably different from the time when state boundaries contained much political discourse and action.