Insiders, Outsiders, or Trend Chasers?: An Investigation of Pre-takeover Transactions in the Shares of Target Firms

Thomas H. Eyssell; Nasser Arshadi

doi:10.1111/j.1475-6803.1993.tb00126.x

Insiders, Outsiders, or Trend Chasers?: An Investigation of Pre-takeover Transactions in the Shares of Target Firms

Thomas H. Eyssell, Nasser Arshadi

University of Missouri-St. Louis

Research output: Contribution to journal › Article › peer-review

Abstract

<div class="line" id="line-7"> In this study we examine pre&hyphen;takeover volume run&hyphen;ups preceding tender offer announcements from 1982 to 1985 and consider three possible explanations for the run&hyphen;ups: (1) they are due primarily to registered insiders, (2) they are due to market anticipation of the impending event by informed outsiders, and (3) they are due (at least in part) to “positive feedback” investors—i.e., those who observe early price and volume increases and buy to “chase the trend.” Our results suggest that pre&hyphen;announcement volume run&hyphen;ups are largely due to trading by registered insiders. We explain this phenomenon in the context of the relatively lax regulatory environment during the period studied.</div>

Original language	American English
Journal	Journal of Financial Research
Volume	16
DOIs	https://doi.org/10.1111/j.1475-6803.1993.tb00126.x
State	Published - Mar 1 1993

Disciplines

Economics
Finance

Access to Document

10.1111/j.1475-6803.1993.tb00126.xLicense: Unspecified

Cite this

@article{a621f7a6beeb4e20b961bdf21976814d,

title = "Insiders, Outsiders, or Trend Chasers?: An Investigation of Pre-takeover Transactions in the Shares of Target Firms",

abstract = " In this study we examine pre&hyphen;takeover volume run&hyphen;ups preceding tender offer announcements from 1982 to 1985 and consider three possible explanations for the run&hyphen;ups: (1) they are due primarily to registered insiders, (2) they are due to market anticipation of the impending event by informed outsiders, and (3) they are due (at least in part) to “positive feedback” investors—i.e., those who observe early price and volume increases and buy to “chase the trend.” Our results suggest that pre&hyphen;announcement volume run&hyphen;ups are largely due to trading by registered insiders. We explain this phenomenon in the context of the relatively lax regulatory environment during the period studied.",

author = "Eyssell, {Thomas H.} and Nasser Arshadi",

note = "Downloadable! In this study we examine pre‐takeover volume run‐ups preceding tender offer announcements from 1982 to 1985 and consider three possible explanations for the run‐ups: (1) they are due primarily to registered insiders, (2) they are due to market anticipation of the impending event by informed outsiders, and (3) they are due (at least in part) to {"}positive feedback{"} investors-i.e., those who observe early price and volume increases and buy to {"}chase the trend.{"}",

year = "1993",

month = mar,

day = "1",

doi = "10.1111/j.1475-6803.1993.tb00126.x",

language = "American English",

volume = "16",

journal = "Journal of Financial Research",

}

TY - JOUR

T1 - Insiders, Outsiders, or Trend Chasers?: An Investigation of Pre-takeover Transactions in the Shares of Target Firms

AU - Eyssell, Thomas H.

AU - Arshadi, Nasser

N1 - Downloadable! In this study we examine pre‐takeover volume run‐ups preceding tender offer announcements from 1982 to 1985 and consider three possible explanations for the run‐ups: (1) they are due primarily to registered insiders, (2) they are due to market anticipation of the impending event by informed outsiders, and (3) they are due (at least in part) to "positive feedback" investors-i.e., those who observe early price and volume increases and buy to "chase the trend."

PY - 1993/3/1

Y1 - 1993/3/1

N2 - In this study we examine pre&hyphen;takeover volume run&hyphen;ups preceding tender offer announcements from 1982 to 1985 and consider three possible explanations for the run&hyphen;ups: (1) they are due primarily to registered insiders, (2) they are due to market anticipation of the impending event by informed outsiders, and (3) they are due (at least in part) to “positive feedback” investors—i.e., those who observe early price and volume increases and buy to “chase the trend.” Our results suggest that pre&hyphen;announcement volume run&hyphen;ups are largely due to trading by registered insiders. We explain this phenomenon in the context of the relatively lax regulatory environment during the period studied.

AB - In this study we examine pre&hyphen;takeover volume run&hyphen;ups preceding tender offer announcements from 1982 to 1985 and consider three possible explanations for the run&hyphen;ups: (1) they are due primarily to registered insiders, (2) they are due to market anticipation of the impending event by informed outsiders, and (3) they are due (at least in part) to “positive feedback” investors—i.e., those who observe early price and volume increases and buy to “chase the trend.” Our results suggest that pre&hyphen;announcement volume run&hyphen;ups are largely due to trading by registered insiders. We explain this phenomenon in the context of the relatively lax regulatory environment during the period studied.

UR - https://ideas.repec.org/a/bla/jfnres/v16y1993i1p49-59.html

U2 - 10.1111/j.1475-6803.1993.tb00126.x

DO - 10.1111/j.1475-6803.1993.tb00126.x

M3 - Article

VL - 16

JO - Journal of Financial Research

JF - Journal of Financial Research

ER -

Insiders, Outsiders, or Trend Chasers?: An Investigation of Pre-takeover Transactions in the Shares of Target Firms

Abstract

Disciplines

Access to Document

Other files and links

Cite this