$VBIV A short summary of this M&A paper: people.stern.nyu.edu/msubra... 1) About 25% of all takeovers have positive abnormal volumes at ~30 days before M&A announcement, which are greater for short-dated, out-of-the-money calls (~6:1 ration in calls:puts volume); 2) Informed trading is more pervasive for larger deals, those for which informed investors may potentially have less uncertainty about the final takeover price, and in cases where target firms receive cash offers; 3) No significant correlation with news and past stock trading (only 7% abnormal stock returns and 19% abnormal stock volumes); 4) Over half of this abnormal activity is unlikely due to speculation, news and rumors, trading by corporate insiders, leakage in the stock market, deal predictability, or beneficial ownership filings by activist investors (illegal insider trading?);
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