The roles of the information environment and the stock price performance of foreign firms in their decision to delist from U.S. exchanges

摘要

We examine the roles of the information environment and the stock price performance of foreign firms in explaining their delisting from U.S. exchanges by focusing on analyst following and cumulative abnormal returns in the pre-delisting periods. We find that compared to non-delisters, firms that delist because of a merger and acquisition have stronger analyst following in the pre-delisting period. On the other hand, involuntary and voluntary delisters experience low and declining analyst coverage prior to delisting. In addition, while firms which delist through a merger and acquisition have strong stock price performance compared to a control sample of non-delisting firms, involuntary delisters display stock price underperformance in the pre-delisting period. Our results suggest that the information environment and the stock price performance play different roles in explaining the delisting decision for different types of delisters. (C) 2018 Elsevier B.V. All rights reserved.