For the high-volume high liquidates, there are positive returns for all holding periods except 52 weeks.
Except for week 4, low volume high liquidates display significant returns at the 1% level for all holding periods.
The overreaction hypothesis, as postulated by De Bondt and Thaler , dictates that stocks that have performed poorly in the past (low liquidate stocks) tend to outperform stocks that have performed well in the past (high liquidate stocks).
However, if SJ sells substantially all of its assets, retains the proceeds without purchasing new assets and does not liquidate
, it could be deemed a personal holding company (PHC) subject to the PHC tax.
Following the exchange, the target liquidates, distributing the acquirer's voting stock and cash to the individual.
After T transfers all of its assets, it liquidates, distributing the A stock and cash to I.
If the corporation liquidates
and the shareholders sell the assets, the passthrough Sec.
Normally, an S corporation (and its shareholders) win incur only one level of tax on a sale, regardless of whether the corporation sells its assets and then liquidates or the shareholder(s) simply sell the stock for the same price.
This problem might be avoided if the trustee has the authority to liquidate the trust and pass the loss to the beneficiary under Regs.