Do investor reactions to merger announcements shape the writing of SEC filings?

Nihat Aktas, Eric de Bodt and Can Deniz Dogan

The British Accounting Review, 2025, vol. 57, issue 3

Abstract: The way filings of mergers and acquisitions (M&A) with the Security Exchange Commission (SEC) are written might depend on investor reactions to initial public announcements of the deal. We examine this investor feedback hypothesis by focusing on the readability and timing of a large sample of SEC documents. We show that acquirers write documents with lower readability and file them faster when investors react negatively to the deal announcement, a finding consistent with strategic obfuscation efforts. The results are robust to alternative empirical choices, such as controlling for deal complexity or the firm's writing style. They are also confirmed using an instrumental variables approach.

Keywords: mergers and acquisitions; SEC filings; Readability; Time to file; Investor feedback (search for similar items in EconPapers)
JEL-codes: G34 G40 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:57:y:2025:i:3:s0890838924002786

DOI: 10.1016/j.bar.2024.101498

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