Crushed by a rational stampede: Strategic share dumping and shareholder insurrections

Attari, Mukerram, Banerjee, Suman and Noe, Thomas (2006) Crushed by a rational stampede: Strategic share dumping and shareholder insurrections. Journal of Financial Economics, 79 (1). pp. 181-222.

Abstract

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.

Item Type: Article
Keywords: Capital, Ownership Structure, Corporate Governance, finance
Subject(s): Finance
Date Deposited: 08 Nov 2011 11:30
Last Modified: 24 Sep 2018 13:27
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/1111

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