Determining the Adopting Environment Management Practices for Environment Sustainabilty: A Proposed Model for Logistics Companies

This research examines the impact of social media, notably Twitter, on stock returns for biotechnology companies after their first public offerings (IPOs). While the risk associated with biotechnology initiatives lessens as the product development cycle progresses, the absolute capital requirements increase. The findings show positive but insignificant cumulative average abnormal returns (CAARs) of 1.97 percent in the first 25 days after the IPO, followed by a drop of tens of percentage points over the next three years. However, when the sample firms are divided into two subsamples based on market value, either under or over USD 500 million, the overall results shift substantially. Companies with a market capitalization of less than USD 500 million have negative CAARs right after the IPO, but this negative CAAR becomes substantial only around day 50. Firms with a market value of more than USD 500 million have positive CAARs right after the IPO, which become significant by day 50 and stay that way for the rest of the year. These findings can be explained by the short attention span of investors, which grows until the end of the quiet period and then declines in the post-IPO years for small businesses. An analysis of Twitter activity and stock returns reveals a strong link between the two, implying that investors’ interest in companies is mirrored in their Twitter usage.

Author(S) Details

Irwan Ibrahim
Malaysia Institute of Transport, UiTM Shah Alam, Malaysia.

Harlina Suzana Jaafar
Malaysia Institute of Transport, UiTM Shah Alam, Malaysia.

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