Tech Stock Valuation

CONCLUSION 201

These results show that, on average, negative returns during the one-year

(10,250) postannouncement period are more than one and one-half times as large

as the negative announcement period returns (–1,0). This negative postannounce-

ment drift is somewhat larger for firms with a relatively high percentage of market

capitalization accounted for by intangible assets.

5

There is no evidence that the

amount of negative postannouncement period drift depends upon firm size, when

firm size is measured by market capitalization.

Thus, it appears that not all of the negative valuation effects tied to goodwill

write-off announcements are realized by the ...