Date of Award
Doctor of Philosophy (PhD)
Finance (Business Administration)
George M. Frankfurter
The positive stock price reaction associated with the announcement of a corporate spinoff is well-documented but not yet explained. This work offers a new hypothesis: investor sentiment may affect the market response to the announcement of a spinoff. The results of an investigation using market-oriented proxies for investor sentiment support this hypothesis. Results of an analysis using non-market proxies for investor sentiment are not consistent with the above hypothesis. An analysis of the long-term effects on shareholder wealth of spinoffs is also conducted. It is found that pre and post-spinoff performance cannot be considered (statistically) significantly different.
Thibodeaux, Verne Lawrence, "Corporate Spinoffs: An Investigation of Short and Long-Term Shareholder Wealth Effects." (1993). LSU Historical Dissertations and Theses. 5600.