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Title

[Webinar] Academic Session: Pessimistic Target Prices by Short Sellers

Location

Online Event

Start Time

21/01/2021 18:00

End Time

21/01/2021 19:00

Category

 

All Day Event

 

Recurrence

 

Location Info

Online event

Event Description

We study the target prices in 637 short-selling reports released from 2010 to 2018. Short sellers claim that the attacked firms' stock prices should drop by 65% on average, but the average price decline is only 6.9% in the one year after the attacks. 

The overwhelmingly pessimistic bias is in sharp contrast to, and much larger in magnitude than the well-documented optimistic bias of target prices in sell side analyst reports. We find that the disclosure of target prices speeds up negative price adjustment and the level of implied downside is indicative of the severity of overvaluation.

Considering the costs and benefits of revealing explicit target prices, we find that short sellers are more likely to provide target prices when the targets are less complex to value, when the prices are expected to decline more, and when the short sellers are more reputable.

Finally, using multiple methods, we tend to conclude that short sellers' pessimistic bias is primarily intentional - they exaggerate predicted price decline to grab the market's attention.

Our evidence suggests that short sellers can be informative (in identifying overvalued stocks) and manipulative (in exaggerating the extent of overvaluation) at the same time.

This event will be held in English

Speaker


Luc Paugam is an associate professor at HEC Paris. He holds a Ph.D. in financial accounting and a MSc in Finance from Université Paris Dauphine. Luc is a former student of ENS Paris-Saclay and a CFA charterholder. 
His research focuses on issues surrounding financial reporting of M&As (goodwill, intangible assets), corporate whistleblowing, CSR, and bank reporting. 
Luc has published in several academic journals including Contemporary Accounting Research, European Accounting Review, Journal of Accounting and Public Policy, Journal of Business Finance & Accounting, and Strategic Management Journal. Books co-authored by Luc include Brand Valuation (Routledge), Evaluation Financière et Normes IFRS (Economica) and Evaluation Financière de la Marque (Economica).
Luc teaches financial accounting in the Grande Ecole and MBA programs. Prior to joining HEC Paris, Luc has been a consultant in corporate finance, an associate professor at ESSEC Business School and a visiting scholar at the University of Houston. 
Luc is an associate editor of European Accounting Review and a board member of the Journal of Business Finance & Accounting, Accounting and Business Research, Accounting in Europe, Accounting Forum and a member of CFA France. He received the ESSEC foundation teaching award in 2016.

Looking forward to seeing you online!


CE Credits

1

Cost

 

Registration

Register HERE

Education Topic

 

Event City

Paris

Event State/Province

 

Event Country

France

Event Region

EMEA

SER Credit

 

Currency

 

Member Price

 

Non-Member Price

 

Candidate Price

 

Event Manager Email

events@cfafrance.org

Non-payment Event

No

Waiting List

No

Target Audiences

No targeting

Date

21/01/2021

EventDate

44 217,75

SeatsPerTable

 

TableCost

 

Event Link

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Event Link Leads To New Tab

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Event Short Info

[Webinar] Academic Session: Pessimistic Target Prices. Luc Paugam studies the target prices in 637 short-selling reports released from 2010 to 2018. Short sellers claim that the attacked firms' stock prices should drop by 65% on average, but the average price decline is only 6.9% in the one year after the attacks.

Event Type

Society; Featured

Attachments

Content Type: Event
Created at 20/08/2020 11:37 by marie-alix.demeyer@cfafrance.org
Last modified at 07/01/2021 08:00 by marie-alix.demeyer@cfafrance.org