TY - JOUR
T1 - Crushed by a rational stampede
T2 - Strategic share dumping and shareholder insurrections
AU - Attari, Mukarram
AU - Banerjee, Suman
AU - Noe, Thomas H.
PY - 2006/1
Y1 - 2006/1
N2 - In this paper, we develop a dynamic model of institutional share dumping surrounding control events. Institutional investors sometimes dump shares, despite trading losses, in order to manipulate share prices and trigger activism by "relationship" investors. These institutional investors are motivated to trade not only by trading profits but also by a desire to protect the value of their inventory and to disguise the quality of their own information. Relationship investor profit from targeting firms both by improving firm performance and by generating private information.
AB - In this paper, we develop a dynamic model of institutional share dumping surrounding control events. Institutional investors sometimes dump shares, despite trading losses, in order to manipulate share prices and trigger activism by "relationship" investors. These institutional investors are motivated to trade not only by trading profits but also by a desire to protect the value of their inventory and to disguise the quality of their own information. Relationship investor profit from targeting firms both by improving firm performance and by generating private information.
KW - Corporate governance
KW - Ownership structure
KW - Strategic trading
UR - http://www.scopus.com/inward/record.url?scp=29244447108&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=29244447108&partnerID=8YFLogxK
U2 - 10.1016/j.jfineco.2004.09.003
DO - 10.1016/j.jfineco.2004.09.003
M3 - Article
AN - SCOPUS:29244447108
SN - 0304-405X
VL - 79
SP - 181
EP - 222
JO - Journal of Financial Economics
JF - Journal of Financial Economics
IS - 1
ER -