Stock (geology)

About: Stock (geology) is a research topic. Over the lifetime, 31009 publications have been published within this topic receiving 783542 citations.

Do Innovations Really Payoff? Total Stock Market Returns to Innovation

Abstract: Critics often decry an earnings-focused short-term orientation of management that eschews spending on risky, long term projects such as innovation in order to boost a firm's stock price The critics' assume that stock markets respond to announcements of earnings that report immediate earnings and not of innovation that have a long-term payoff Contrary to this position, the authors argue that the market's true appreciation of innovation can be estimated by assessing the total market returns to the entire innovation project The authors demonstrate this approach via the Fama-French 3 Factor Model (including Carhart's Momentum Factor) on 5481 announcements from 69 firms in 5 markets and 19 technologies, during the period 1977-2006 The authors find that total market returns to an innovation project are $643 million, more than 13 times the $49 million due to an average innovation event Returns to negative events are higher in absolute value than those to positive events Returns to development activities are higher than returns to either the setup or market activities Returns are higher for smaller firms than larger firms Returns to the announcing firm are substantially greater than those to competitors across all stages The authors discuss the implications of the results

Real and Financial Industry Booms and Busts

Abstract: We examine how product market competition affects firm cash flows and stock returns in industry booms and busts. Our results show how real and financial factors interact in industry business cycles. In competitive industries, we find that high industry-level stock market valuation, investment, and financing are followed by sharply lower oper ating cash flows and abnormal stock returns. Analyst estimates are positively biased and returns comove more. In concentrated industries these relations are weak and generally insignificant. Our results are consistent with participants in competitive industries not fully internalizing the negative externality of industry competition on cash flows and stock returns. Throughout history, industries have gone through cycles in which firms have very high valuations and investment followed by lower subsequent valuations and investment. Periods associated with high valuations are commonly writ ten about as the start of a "new era" in which productivity increases and new products justify very high stock prices and prompt massive investment.1 This phenomenon is present in many industries over time, and recent examples include the recent real estate boom and late 1990s internet and telecommuni cations boom.2 In this paper, we ask whether product market characteristics

The Relation between Stock Prices and Inflationary Expectations: The International Evidence

Abstract: This paper provides empirical evidence on the relation between stock returns and inflationary expectations for nine countries over the period 1971-80. The Fisherian assumption that real returns are independent of inflationary expectations is soundly rejected for each major stock market of the world. Using interest rates as a proxy for expected inflation, our data provide consistent support for the Geske and Roll model whose basic hypothesis is that stock price movements signal (negative) revisions in inflationary expectations. Finally, a weak real interest rate effect was found for some of these countries.

Trading and Pricing in Upstairs and Downstairs Stock Markets

Abstract: We provide empirical evidence on the economic benefits of negotiating trades in the upstairs trading room of brokerage firms relative to the downstairs market. Using Helsinki Stock Exchange data, we find that upstairs trades tend to have lower information content and lower price impacts than downstairs trades. This is consistent with the hypotheses that the upstairs market is better at pricing uninformed liquidity trades and that upstairs brokers can give better prices to their customers if they know the unexpressed demands of other customers. We find that these economic benefits depend on price discovery occurring in the downstairs market. Copyright 2002, Oxford University Press.

Who Writes the News? Corporate Press Releases during Merger Negotiations

Abstract: Firms have an incentive to manage media coverage to influence their stock prices during important corporate events. Using comprehensive data on media coverage and merger negotiations, we find that bidders in stock mergers originate substantially more news stories after the start of merger negotiations, but before the public announcement. This strategy generates a short-lived run-up in bidders' stock prices during the period when the stock exchange ratio is determined, which substantially impacts the takeover price. Our results demonstrate that the timing and content of financial media coverage may be biased by firms seeking to manipulate their stock price.