Market Mispricing Timing and Post-acquisition Performance: Evidence from Chinese A-share Firms

This study examines the impact of market mispricing timing on short-term and long-term performance acquiring firms in context China's capital market. Using a comprehensive dataset A-share listed companies engaged mergers acquisitions (M&A) between 2007 2021, we investigate whether M&A activities conducted during periods overvaluation lead to enhanced while failing generate sustained benefits. Our findings reveal that executed exhibit significantly improved stock performance, reflecting alignment merger announcements with optimistic investor sentiment. However, such positive effects do not extend outcomes. The underscores critical influence immediate post-acquisition but highlights its limited financial performance. These insights contribute better understanding behavior within Chinese market, demonstrating capitalizing can yield advantages, sustainable gains hinge other factors beyond timing.