The Impact of Unexpected Event on Mercedes-Benz’s Stock Price Analysis Based on Event Study

Ruiheng Chen ()
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Ruiheng Chen: Ritsumeikan Asia Pacific University, College of International Management

A chapter in Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025), 2025, pp 1010-1024 from Springer

Abstract: Abstract In this paper, the Mercedes Maybach water leakage incident that occurred on August 6, 2024 is taken as the research subject of the study, and the short-term impact of the incident on the Mercedes-Benz Group AG’s stock is assessed by using the Event Study method and statistical test. Abnormal Return (AR) and Cumulative Abnormal Return (CAR) are calculated by daily return and market excess returns (Mkt-RF), and the results show that the mean value of CAR is significantly negative, which indicates that the unexpected event has a significant negative impact on the company’s stock performance. Subsequently, the paper forecasts the daily returns for the next six months using the Gradient Boosting Model (GBM) and finds that the overall volatility of the returns is relatively moderate, but still exhibits some localized fluctuations, reflecting the continued sensitivity of investors to changes in brand reputation and market environment. The findings emphasize the importance of prompt and transparent disclosure and public relations strategies to mitigate negative impacts after a financial crisis. Last, this paper also provides an improvement strategy for the methodology by introducing more market factors to build the market model in order to enhance the stability.

Keywords: Abnormal Return; Event Study Method; Gradient Boosting Model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-748-9_110

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DOI: 10.2991/978-94-6463-748-9_110

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