An Enterprise on Its Way to Financial Distress – the Intra-industry Effect of Critical Events. The Case of GetBack SA
An Enterprise on Its Way to Financial Distress – the Intra-industry Effect of Critical Events. The Case of GetBack SA

Summary/Abstract: The paper is aimed at identifying critical events preceding financial distress of GetBack and presenting the impact of these events on GetBack’s market rivals. According to academic literature, the effect of an event announcement is transferred over the competitors of the focal firm and may affect their market value. The research hypothesisis that the critical events on the GetBack’s way to financial distress significantly affectedits market rivals. The method used in the paper is the event study analysis. Three critical events were identified, which affected significantly the returns of Getback. The transfer of a reaction to the events on GetBack’s rivals is not so clear. It turned out that the event,which was the loss of interest of foreign investor in acquisition of GetBack shares, affectedrivals’ returns in a positive way. It indicates that a competitive effect was dominant in this case. The average effect for the rivals in the case of two remaining events seems to be irrelevant. Such results indicate that the research hypothesis can be verified partially in a positive way, however, the topic needs further and in-depth studies.

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