Tech Stock Valuation

announcements consistently result in statistically significant stock-price effects,

they can be regarded as important in the formation of investor expectations con-

cerning future cash flows.

Findings reported here have direct relevance for competitive policy in

dynamic high-tech markets and for the corporate governance literature. Our find-

ings lend empirical support to arguments that negative wealth effects tied to the

launch of enforcement activity by the DOJ, FTC, or SEC are most severe for

high-tech firms that stand to lose significant amounts of reputational capital.

Moreover, analysis of the competitive environment of affected firms suggests that ...