Past event
Department of Finance Seminar with Professor Douglas Cumming, Florida Atlantic University Stock Market Manipulation and Corporate Venture Capital Investments
Abstract: The paper investigates the relationship between corporate venture capital (CVC) and stock market manipulation for NASDAQ and NYSE-listed companies. Compared to non-CVC firms, those with CVCs show 16% fewer manipulations on average. However, CVC investments in entrepreneurial firms are followed by a rise in market manipulation in the short run (around 6 months), but a decline thereafter. Stock manipulation harms the ability of CVCs to form investment syndicates and reduces the likelihood of successful IPO and acquisition exits. The hazard rate to IPO is 0.54 for CVC-backed firms that face market manipulation.