The Impact of Shareholders Conflict on Market Value of Company. Evidence from MMC Norilsk Nickel

The focus of this research aims to study the impact of conflict of two major GMK "Norilsk Nickel" shareholders on market value of the company. In the analysis of news flow over the period from 2008 to 2013 were identified 57 events with reference to the conflict of shareholders GMK "Norilsk Nickel". To study the market reaction to reports of the conflict was used event studies that enables to measure market reaction using abnormal return at the time of the event. The analysis of the market reaction to the news about the existence of the corporate conflict at Norilsk Nickel," revealed that the market in general negatively evaluates the conflict of interests of majority shareholders within the company and responds by decrease in quotations, with an average abnormal return of minus 1.87%. The total abnormal return in the period of conflict amounted to minus 12%. At the same time, shareholders have suffered huge direct and indirect losses, which together amounted to $ 1 billion., or 4% of the capitalization of the company at the end of the conflict. The results are consistent with Russian and foreign research papers, during which there were also revealed a significant decline in stock prices and observed negative abnormal return at the time of publication of news about the conflict. In the case of 41 of the 57 predicted response coincides with the actual reaction of the market. In other cases, the estimated market reaction was not confirmed. The hypothesis about the positive effect of stock buybacks was also confirmed. The empirical results are consistent with the results of studies on data from Europe and the United States.