The information content of ticker symbol change: Evidence from multiple class shares

Abstract

This chapter analyzes the market response to ticker symbol change of stocks with non-conventional voting structures (or multiple class shares, MCS). I find a significant drop (increase) in prices and liquidity (short-sale activity) of MCS stocks, with the most severe decrease being reported for the lower-voting class. This evidence suggests that investors revised downward the assessment of MCS stocks. Regression analysis shows that a significant part of the cross-sectional variation of the event-results is explained by firm's agency costs. Overall, the chapter stresses the importance of enhanced market transparency in curbing private benefits.

Citation

Attig, N. (2008), "The information content of ticker symbol change: Evidence from multiple class shares", Choi, J.J. and Dow, S. (Ed.) Institutional Approach to Global Corporate Governance: Business Systems and Beyond (International Finance Review, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 241-266. https://doi.org/10.1016/S1569-3767(08)09011-0