3. BITÁCORA DE UNA REMEDIACIÓN
3.4. Las video animaciones, la remediación final
There are several limitations to this study. First, market behavior is generally different under different economic circumstances. Although mergers are a well-studied phenomenon, the repeated study of differing periods could result in different conclusions. Second, as in any event study, the determination of the lengths of the ante- and post-event periods used in measuring returns may not be optimal. As a result, future researchers may wish to experiment with differing lengths of time to determine if any particular periods differed in their return profile.
Future studies on this topic could measure a similar dataset against different market benchmarks other than the CRSP Value-Weighted index. For example, the Standard & Poors 500 Composite index, the Equal-Weighted CRSP total market index, and the CRSP/Ziman real estate index could provide different results than the results obtained in this study and be more appropriate given the market capitalization and real estate focus of the merged stocks. Future researchers may also want to consider the impact of significant dates other than the
merger announcement date as the critical period for an event study. Data are readily
obtainable from the Securities and Exchange Commission from which the dates of entry into confidentiality agreements, calls for offers, number of potential bidders at various points in time, and serious negotiation could be determined and utilized as Day 0 (the announcement date) in event studies in order to identify potential information leakage and insider trading activity. Researchers might also consider developing a logit model to determine whether early increases in volume and price might be predictive of future merger activity.
3.7 Conclusions
This study is significant in that it is the first to provide an empirical analysis of the most recent wave of hospitality merger and acquisition activity. Further, the dataset is very recent in comparison to the date of publication, which has not always been the case in previous, similar studies. This paper contributes to the body of knowledge regarding trading activity in hotel stocks and should be of significant interest to other hospitality industry researchers who may wish to further explore this topic or apply its findings to other aspects of the hospitality industry, including restaurants, cruise ships, or gaming, all of which saw similar merger and acquisition activity during the same period. This is of value to both researchers and practitioners as the cyclical nature of the hotel real estate industry and hotel stock and REIT performance will continue to result in future boom and bust cycles. One need only fast forward to October of 2008, 12 months from the last completed merger in this study, to see a decline in the average lodging stock of more than 70% from the peak levels of October 2007.
This is the first study to review abnormal trading volume data for hotel stocks subject to mergers and acquisitions and clearly identifies that there were not unexplained abnormal
volume trends in the period prior the merger announcement date. It was expected that there might be significant abnormal stock behavior in the period surrounding merger and
acquisition transactions in hotel stocks between 2004 and 2007. This expectation was based, in part, on evidence from other industries that there is often a significant increase in price and volume in the period prior to announcements of merger and acquisition transactions. There was no reason to think that this would not be true within the hotel industry, perhaps even more so given the comparatively small community of industry leaders, investment bankers, and industry publications. Most of these previous studies have been inconclusive as to whether the source of the abnormal trading was related to illegal insider trading or other market factors including arbitrageurs and general investor accumulation based on prior and current transactions.
This study did not find meaningful statistical differences in abnormal return in the period prior to the merger announcement date for hotel stocks. This is consistent with the findings of Oak and Andrew (2006), who did not identify informed trading prior to
hospitality acquisitions, although their study was focused on an analysis of bid–ask spreads rather than abnormal return.
The lack of statistically significant abnormal returns in the 20 trading days before the merger announcement and the identification of statistically significant abnormal returns in the 20 days including and after the merger announcement date generally confirms the findings of Kwansa (1994) and Canina (2001). The synchronized data are particularly noteworthy as they identified an abnormal return only on the merger announcement date (Day 0) as being statistically significant with an abnormal return of 0.55% on Day –1, 15.8% on Day 0, and –0.02% on Day +1. This is somewhat different than the findings in previous
studies in which Kwansa (1994) found abnormal returns averaging 3.8% on Day –2, 9.7% on Day –1, 5.8% on Day 0, and 5.5% on Day +1. The results in the present study were more similar to the Canina (2001) study in which abnormal returns averaged 0.65% on Day –1, 8.9% on Day 0, and 1.3% on Day +1. One could observe that, as the availability of information has become more prevalent, trading becomes more concentrated on the actual date of the merger announcement rather than on days surrounding it. In part, this is likely due to the prominence of institutional investors, whose involvement in financial markets have generally made prices more efficient both in the overall market (Boehmer & Kelley, 2009) as well as in the hospitality industry (Oak & Dalbor, 2008).
The data in this study are also of value to individual investors, company management, hedge funds, and hotel stock analysts who can use this data and event study methodology to better understand the nature of information flow surrounding merger and acquisition events and understand that it is unlikely that an indicator of preannouncement trading will be found. In conclusion, the abnormal returns observed on the merger announcement date are
statistically significant but merely represent the market’s reaction to a known price agreed to as part of a proposed merger or acquisition.
3.8 Acknowledgement
The author would like to thank the College of Business at Iowa State University for providing support for the access through Wharton Research Data Services to the CRSP dataset and Eventus software.
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