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Trading biopharmaceutical stocks after catastrophic one-day declines

by Ward, Daniel Elliott

Abstract

This thesis analyzes volatility of small capitalization biopharmaceutical stocks after significant one-day price drops. Stock performances after one-day declines of ten percent or greater for companies in the NASDAQ Biotechnology Index were gathered from 2011-2012 to test for evidence of market overreaction. While no substantial evidence was found for overreaction, long-term performance suggested that traders underreact during the initial stock drop, with underreaction most prevalent in stocks seeing an initial one-day drop of at least twenty percent. Overreaction only appeared present when companies saw a stock drop due to negative pipeline results.

Note

Colorado College Honor Code upheld.

Includes bibliographical references

Administrative Notes

Colorado College Honor Code upheld.

Copyright
Copyright restrictions apply.
Publisher
Colorado College
PID
coccc:6758
Digital Origin
born digital
Extent
74 pages : illustrations (some color)
Thesis
Senior Thesis -- Colorado College
Thesis Advisor
Parco, Jim
Department/Program
Economics and Business
Degree Name
bachelor
Degree Type
Bachelor of Arts
Degree Grantor
Colorado College
Date Issued
2012