TAILIEUCHUNG - DotComMania:The Rise and Fall of Internet Stock

Two other studies also examine the relation between earnings and the price response to splits; unfortunately, due to methodological differences their results provide no evidence regarding the issue raised by AHP. For example, McNichols and Dravid [19] find that split announcement-period abnormal returns are positively related to analysts' earnings forecast errors observed for the fiscal year-end that follows the announcement. At first glance, this result appears inconsistent with AHP. However, unless one knows the source of analysts' underestimation of post-split earnings, ., unanticipated earnings increase after the split or analysts not recognizing that pre-split earnings increases are permanent, it is impossible to conclude that their results. | THE JOURNAL OF FINANCE VOL. LVIII NO. 3 JUNE 2003 DotCom Mania The Rise and Fall of Internet Stock Prices ELI OFEK and MATTHEW RICHARDSON ABSTRACT This paper explores a model based on agents with heterogenous beliefs facing short sales restrictions and its explanation for the rise persistence and eventual fall of Internet stock prices. First we document substantial short sale restrictions for Internet stocks. Second using data on Internet holdings and block trades we show a link between heterogeneity and price effects for Internet stocks. Third arguing that lockup expirations are a loosening of the short sale constraint we document average long-run excess returns as low as 33 percent for Internet stocks link the Internet bubble burst to the unprecedented level of lockup expirations and insider selling. In THETWO-YEAR PERIOD from early 1998 through February 2000 the Internet sector earned over 1000 percent returns on its public equity. In fact by this date the Internet sector equaled 6 percent of the market capitalization of all . public companies and 20 percent of all publicly traded equity volume. As is well documented however these returns had completely disappeared by the end of 2000. What can explain this rise persistence and then subsequent fall of Internet stock prices This paper provides empirical support for one potential explanation that has garnered recent attention in the literature. In particular there is a considerable and growing literature that looks at the impact of short sales restrictions on stock prices in a setting with heterogenous investors see . Lintner 1969 Miller 1977 Figlewski 1981 Jarrow 1981 Diether Malloy and Scherbina 2002 Ofek and Richardson 2001 Chen Hong and Stein 2002 Duffie Garleanu and Pedersen 2002 and Jones and Lamont 2002 among others . In these models asset prices are a weighted average of beliefs about asset the asset prices are equilibrium determined to the extent that they reflect the .

• Đầu tư Chứng khoán
• sales restrictions
• between heterogeneity
• Allergen Bioinformatics
• Recent Trends
• Developments
• Family Based Studies
• versus non Internet
• Manufacturing
• Mechanical Improvement
• Ramie Woven
• Reinforced Starch
• Pricing Functional
• Optimal Portfolios
• Equilibrium Pricing
• Diagrammatic Representation
• Contingent Claims