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Research Paper | Economics & Management | China | Volume 8 Issue 9, September 2019
Research on the Influence of M&A Goodwill on Stock Price Fluctuation
Wang Tao [9] | Tang Chu
Abstract: This paper discusses the relationship between M & A goodwill and short - term stock price fluctuation on the background of M & A market. The research found that: goodwill aggravates the fluctuation range of stock price, and the relationship between the two is mainly derived from the samples with high goodwill, which preliminarily proves that the stock price of companies with high goodwill has a certain degree of bubble. Goodwill boosts corporate performance and investors overreact to mergers and acquisitions, creating bubbles in share prices. The decline of performance after M & A can be regarded as a signal of overvaluation of stock price, and the relationship between goodwill and stock price fluctuation is more obvious at this time. Further analysis shows that the relationship between goodwill and stock price volatility risk is more obvious when investors hold shares for a short period of time, the company is highly valued and the market is good. This paper enriches the research on the economic consequences of mergers and acquisitions of listed companies, reflects the unique nature of mergers and acquisitions in the early stage of development of countries with transitional economies, and has certain enlightenment on reducing stock price fluctuations and maintaining financial market stability.
Keywords: M & A, Goodwill, Share Price Volatility
Edition: Volume 8 Issue 9, September 2019,
Pages: 1137 - 1140