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| Type | Bachelor's Thesis |
| Scope | Discipline-based scholarship |
| Title | Is two divided by two always one? A study of spin-offs in the period 2000-2016 in the USA |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Number of Pages | 40 |
| Date | 2020 |
| Abstract Text | This bachelor thesis covers the stock price reaction at the announcement of a spin-off. First, the previous academic research about the stock price reaction at the announcement of a spin-ff are discussed. These research showed mainly a positive reaction. Then, several theroires are discussed why a spin-off generate value. Later, the short and long term stock price reaction are analyzed at the announcement of a spin-off in the USA from 2000 to 2016. Finally, two theories were analysed why the reaction is positive. By separating the two companies, negative synergies are reduced. This elimination is stronger when the two companies work in different industries. Furthermore, academic research has argued that the positive reaction is driven by a higher takeover probability. The methodology of Greenwood and Schor (2009) is used to test this theory. This thesis is unique because the older academic research had used a matching approach to calculate the abnormal returns. Here, a market-risk model is used for the calculation. Furthermore, the past academic analyses used the data mainly before 2003, and this thesis used more recent data from 2000 to 2016. |
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