search query: @author Stephenson, K. / total: 4
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| Author: | Hubbard, J. Stephenson, K. |
| Title: | Bankrupt stocks, reorganization plans and market efficiency: Are bankrupt stocks overpriced? |
| Journal: | Quarterly Review of Economics and Finance
1997 : SUMMER, VOL. 37:2, p. 547-562 |
| Index terms: | BANKRUPTCY STOCK MARKETS PRICING EFFICIENCY |
| Language: | eng |
| Abstract: | This study examines companies whose shares continued to be actively traded after filing for bankcruptcy to determine if the stock price reflected what the shareholders would ultimately receive. The study shows that, in retrospect, investors grossly overpaid for what would be received from bankrupt companies. About a quarter of the companies filed reorganization plans which gave nothing to the shareholders. The stock of roughly one-third of these firms continued to be actively traded after the plans were filed, at prices that appear to be irrational. Over one-third of the entire sample was delisted before ever filing a reorganization plan. For those remaining on an exchange, the price the day after the first plan was filed was well above what the shareholders ultimately received. |
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