Derivatives Trading and Negative Voting

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Derivatives Trading and Negative Voting

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Title: Derivatives Trading and Negative Voting
Author: Spamann, Holger
Citation: Holger Spamann, Derivatives Trading and Negative Voting, Harvard Law, Economics, and Business Discussion Paper No. 730 (Sept. 10, 2012).
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Abstract: This paper exposits a model of parallel trading of corporate securities (shares, bonds) and derivatives in which a large trader can sometimes profitably acquire securities with their corporate control rights for the sole purpose of reducing the corporations value and gaining on a net short position created through off-setting derivatives. At other times, the large trader profitably takes a net long position. The large trader requires no private information beyond its own trades. The problem is most likely to manifest when derivatives trade on an exchange and transactions give blocking powers to small minorities, particularly out-of-bankruptcy restructurings and freezeouts.
Other Sources: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2144552
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:12331809
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