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SUMMARY:When Shareholders Disagree: Trading after Shareholder Meetings - E
 rnst Maug (University of Mannheim\, Business School)
DTSTART:20200220T123000Z
DTEND:20200220T133000Z
UID:TALK131308@talks.cam.ac.uk
CONTACT:CERF/CF Admin
DESCRIPTION:This paper analyzes how trading after shareholder meetings cha
 nges the composition of the shareholder base. Using data on daily trades w
 e find that mutual funds reduce their holdings if their votes are opposed 
 to the voting outcome. Trading volume is high even when stock prices do no
 t change\, peaks at the meeting date\, and remains high up to four weeks a
 fter shareholder meetings. These findings are difficult to reconcile with 
 models in which shareholders trade because of differences in information. 
 Fund characteristics that proxy for heterogeneous preferences are relevant
  for funds’ trading decisions\, but do not explain our results. We explo
 re a model of trading based on differences of opinion\, which offers sharp
  predictions on the relationship between volume and volatility\, find stro
 ng support for its predictions in the data\, and little to support models 
 in which voting aggregates information. We conclude that shareholders disa
 gree when they vote at meetings. Hence\, trading after-meetings creates a 
 shareholder base with more homogeneous beliefs. We argue that these findin
 gs have important implications for corporate governance.
LOCATION:KH107\, Keynes House\, Cambridge Judge Business School
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