# Investor reaction `kaal:entity:investor-reaction` **Status.** derived This node is assembled mechanically from the 11 claims that carry the concept tag `investor-reaction`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 11 claims across 1 works, 2015 to 2015. **2015** - [2629451-005](https://wulfkaal.github.io/claims/2629451-005) [empirical/evidenced] -- Investors react negatively to impending N/DPA driven changes in the period before the agreement is executed, but once the N/DPA is executed they generally treat it as a positive event for the firm. > Our results suggest that while investors consistently react negatively to impending N/DPA changes prior to N/DPA execution, post N/DPA execution, investors generally do perceive N/DPAs as a positive event for the respective entity. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-006](https://wulfkaal.github.io/claims/2629451-006) [empirical/evidenced] -- Investors treat the expiration of an N/DPA term as a negative event for the firm. > Inversely, our results suggest that investors see the expiry of applicable N/DPA terms as a negative event. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-019](https://wulfkaal.github.io/claims/2629451-019) [mechanism/argued] -- The negative pricing of N/DPA firms immediately before the announcement reflects the market's negative assessment of the agreement and its associated fines, plausibly driven by uncertainty in the days before the announcement resolves it. > This data suggests that the market assesses the impact of the N/DPA and the often associated fines negatively immediately before the announcement of the N/DPA execution, which could be a function of market uncertainty before the N/DPA announcement. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-020](https://wulfkaal.github.io/claims/2629451-020) [mechanism/argued] -- The positive post-announcement reaction is best read as the market rewarding both the end of a costly DOJ investigation and the governance terms the N/DPA is expected to impose. > the positive market reaction from t=0 to t=25 as a positive reaction to the end of the costly DOJ investigation and the anticipated governance terms imposed by the N/DPA. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-021](https://wulfkaal.github.io/claims/2629451-021) [empirical/evidenced] -- Immediately before the N/DPA term becomes effective, from day minus three to day minus one, the market prices the onset of the term as a negative event. > suggests that the market assesses the impact of the beginning of the N/DPA term as a negative event immediately before the N/DPAs become effective from t=-3 to t=-1. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-024](https://wulfkaal.github.io/claims/2629451-024) [mechanism/argued] -- Negative returns after the end of the N/DPA term are evidence that investors regard the expiration of the term, and the consequent unenforceability of the associated governance improvements, as bad news for the firm. > We interpret the negative N/DPA firms' CARs from t=1 to t=15 in Figures 4 and 4a as evidence that investors see the expiration of the N/DPA term and the expiration and following unenforceability of associated governance improvements as a negative event for the respective entity. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-025](https://wulfkaal.github.io/claims/2629451-025) [empirical/evidenced] *(failure mode)* -- The authors reject Hypothesis 1: they find no evidence that the market reacts negatively to the N/DPA announcement and the start of the term and positively to the end of the term, contrary to the cost-imposition view of N/DPAs. > There is no evidence to support Hypothesis 1: The market does not react negatively at ANDPAE (E1a) and BNDPAT (E1b) and positively at ENDPAT (E1c). Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-026](https://wulfkaal.github.io/claims/2629451-026) [empirical/evidenced] -- The data support Hypothesis 2: the market reacts positively at the DOJ announcement and at the start of the N/DPA term and negatively at the end of the term. > Figures 2 to 4a support Hypothesis 2: The market reacts positively at ANDPAE (E1a) and BNDPAT (E1b) and negatively at ENDPAT (E1c). Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-027](https://wulfkaal.github.io/claims/2629451-027) [mechanism/argued] -- The positive market reaction at announcement and at the start of the term is the market acknowledging that an N/DPA gives the firm an opportunity to be better managed, more compliant, and less exposed to penalties. > Consistent with Hypothesis 2, we interpret the positive market reaction at ANDPA and BNDPAT as the market's acknowledgement that the execution and effectiveness of an N/DPA is an opportunity for the entity to be better managed, more compliant, with fewer possibilities to incur penalties Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-028](https://wulfkaal.github.io/claims/2629451-028) [mechanism/argued] *(failure mode)* -- The negative market reaction at the end of the N/DPA term is the market acknowledging that suboptimal governance practices are likely to resume once the term expires. > In turn, we interpret the negative market reaction at ENDPAT in Figures 4 and 4a as the market's acknowledgment that post N/DPA term expiration suboptimal governance practices are likely to continue Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 - [2629451-030](https://wulfkaal.github.io/claims/2629451-030) [mechanism/argued] -- The paired positive reaction at the start and negative reaction at the end of the N/DPA term is direct evidence that N/DPA mandated governance changes matter to investors. > We interpret the positive market reaction at BNDPAT and its negative reaction at ENDPAT as evidence that governance changes mandated by N/DPAs matter. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/investor-reaction.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.