Assessments of Mergers and Acquisitions of Digital Platforms: are there Specific Features Important for Investors

The paper is devoted to the impact of merger and acquisition deals of digital platforms on their market valuation. Thereby, the issue is special interests for digital platforms (DPs). DPs represent rapidly growing group of companies, which apply specific business models. At the same time, the effects of mergers by platforms are underexplored in financial researchers. The main goal of the research is to analyze the quantitative effect of M&A deals on company’s valuation, considering the dynamics of stock prices of the acquirer. In the first part specific features of business models of digital companies will be determined, including the effects that distinguish them from other ordinary companies. In the second part, an empirical analysis will be used to measure the abnormal stock returns of a digital acquirer when an M&A deal is announced. Event analysis will be applied to two groups of digital platforms in the time interval between 2010 and 2020. The first sample consists of world’s largest digital giants by capitalization, while the second will include two Russian technology companies. It is expected to observe positive abnormal stock returns of selected digital platforms in event windows, which significantly exceed the absolute value of ordinary companies’ abnormal returns. Furthermore, due to a different market profile, it is strongly believed that higher rates of abnormal stock returns of acquiring companies are expected in the Russian market after the announcement of mergers and acquisitions.