Degree Name

Department

Finance

College

Marriott School of Management

Defense Date

2018-02-23

Publication Date

2018-04-11

First Faculty Advisor

Dr. Bronson Argyle

First Faculty Reader

Dr. Rob Schonlau

Honors Coordinator

Dr. Hal Heaton

Keywords

textual analysis, mergers & acquisitions, sentiment analysis, DICTION, DEFM SEC filings, optimism

Abstract

Modern corporations utilize mergers and acquisitions as strategies to develop shareholder value today more than ever before, yet the need for understanding firms’ rationale and strategy is critical in predicting post-merger stock performance for all investors. I apply the interpretive power of textual analysis and regression to a corpus of SEC mergers and acquisitions public company filings between 1994-2017. Not only do I challenge the statistically significant correlation between word content and post-transaction abnormal stock returns, but I also characterize the effects of time segments, transaction size, and industry variation across time. As a final application, I consider sentiment analysis using Diction software packages across the corpus, and measure correlation across economic cycles to assess post-filing stock performance.

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