文摘
The S&P500 index rose by an average of 26% per year between 1995 and 1999,while the tech-dominated NASDAQ composite index earned returns of approximately 42% per year. Subsequently,in 2000,the market index fell by almost 11%;at the same time,the NASDAQ fell by about 41%. These changes reflect the way in which investors perceived high-tech firms as highly performing firms to be targeted by acquiring firms. In this paper,I examine the performance of bidders acquiring high-tech targets. First,I find positive abnormal returns for the bidders during 1996-2003. Using the market model and a control-firm approach,I find that abnormal returns were higher before the stock market crash of 2000. Second,I determine the relation between the characteristics of bidders and their excess returns. A positive relationship between managerial ownership and abnormal returns is observed. Third,I study the changes in the accounting-based performance measures of the bidders,and find that high-tech acquisitions completed before the crash were accompanied by poor post-acquisition performance,over a one-year comparison window. Finally,I also find evidence that cash-rich bidders acquired high-tech targets to seize growth opportunities,and as a result,earned high abnormal returns. Overall,my results suggest that investors were overoptimistic about the future performance of high-tech mergers,but have lowered their expectations over time.
