Gerard Hoberg

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We use text-based analysis of 10-K product descriptions to examine whether firms exploit product market synergies through asset complementarities in mergers and acquisitions. Transactions are more likely between firms that use similar product market language. Transaction stock returns, ex post cash flows, and growth in product descriptions all increase for(More)
We examine how product market competition affects firm cash flows and stock returns in industry booms and busts. Our results show how real and financial factors interact in industry business cycles. In competitive industries, we find that high industry-level stock market valuation, investment, and financing are followed by sharply lower operating cash flows(More)
Why do security analysts issue overly positive recommendations? We propose a novel approach to distinguish strategic motives (e.g., generating small-investor purchases and pleasing management) from nonstrategic motives (genuine overoptimism). We argue that nonstrategic distorters tend to issue both positive recommendations and optimistic forecasts, while(More)
We introduce a new framework for forming peer firm portfolios that can account for firm uniqueness and organizational form. Our new vocabulary-based peer firm portfolios explain much cross sectional dispersion in firm valuations and generate a direct measure of firm product market uniqueness. We find that firms have higher stock market valuations than their(More)
Using word content analysis on the time-series of IPO prospectuses, we show that issuers tradeoff underpricing and strategic disclosure as potential hedges against litigation risk. This tradeoff explains a significant fraction of the variation in prospectus revision patterns, IPO underpricing, the partial adjustment phenomenon, and litigation outcomes. We(More)
Using text-based computational analysis, we examine whether firm stock market valuations reflect product uniqueness and how firms covary with peers in the stock market. We find that firms have higher stock market valuations than matched peer firms when their product portfolios are more unique relative to matched peer firms. We also find that the returns of(More)
This study investigates how the media produces information. Using a sample of 296,497 Wall Street Journal news articles, I find that news articles written by experienced and reputable financial journalists are more informative about future earnings. I then examine the source of such information advantage by studying the detailed quotes from news articles. I(More)