• Medientyp: E-Artikel
  • Titel: Divergence of Opinion Surrounding Extreme Events
  • Beteiligte: Loughran, Tim; Marietta‐Westberg, Jennifer
  • Erschienen: Wiley, 2005
  • Erschienen in: European Financial Management
  • Sprache: Englisch
  • DOI: 10.1111/j.1354-7798.2005.00299.x
  • ISSN: 1354-7798; 1468-036X
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  • Beschreibung: <jats:title>Abstract</jats:title><jats:p> <jats:italic>This paper examines the stock market performance of a large sample of new issues (IPOs and SEOs) following an extreme price movement during the first three years after the offering. Strong underperformance follows either a positive or negative (at least +/−15%) one‐day return event. This poor performance cannot be explained by the Fama‐French four‐factor methodology, or by the generally low stock returns of growth firms. Unlike recent issuers, non‐issuers report no poor performance following a similar extreme event using the four‐factor methodology. The extreme event date shows very high levels of turnover, a measure of divergence of opinion. Finally, there is a strong negative linkage between higher levels of divergence of opinion and subsequent stock performance</jats:italic>.</jats:p>