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Advisor(s)
Abstract(s)
This study used event study methodology to examine the impact Hindenburg Research shortseller
reports on targeted firms. The results show negative abnormal returns in firms when
those reports reveal bad news about malpractices and misconduct. Our results show a higher
negative stock market reaction to the Hindenburg reports when target firms are small, have
higher leverage, higher Tobin’s Q, and corporate malpractice involves financial fraud. Our
findings evidence that adverse information disclosed in the Hindenburg report led to a “torpedo
effect”, resulted in sharp, immediate, and persistent share price drops.
Description
Keywords
Short-selling Malpractices and misconduct Financial market analysis Event study Abnormal returns
Citation
Albuquerque, Bruno; Martins, António Miguel; Moutinho, Nuno (2025). Stock market effects of corporate malpractices and misconduct: Evidence from the short-seller Hindenburg. Finance Research Letters. ISSN 1544-6123. 72, p. 1-9
Publisher
Elsevier