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- W289658076 abstract "Equity restructuring has, for a long time, been of interest for corporate management's. During the previous decade a new form of equity restructuring, called tracking stock, came into focus. While the positive announcement returns of tracking stocks are well documented, a thorough examination of the long-term effects of shareholder value is lacking. This paper shows that issuers of tracking stocks do not earn either positive or negative abnormal return on one respectively three years following the issue date. The evidence contrasts with previous studies on long-term returns of spin-offs that are known to be positive and in accordance to carve-outs, which are known to be insignificant. In contrast, tracking stocks significantly underperform our benchmarks in the long run. Further, the correlation between the parent company and the tracked unit are calculated to evaluate if the market really values the tracked unit as a stand-alone entity. The result indicates that the goal is not achieved, i.e. the parent and tracked unit still correlates in terms of share values." @default.
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- W289658076 date "2000-01-01" @default.
- W289658076 modified "2023-09-27" @default.
- W289658076 title "Long-term effect on shareholder value in a Tracking Stock Equity Structure : -Confusion or Solution?" @default.
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