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Campus Only Senior Thesis

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Bachelor of Arts



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Reader 1

Darren Filson

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© 2023 Christopher H Garnett


I estimate cumulative abnormal returns (CARs) associated with investment announcements of corporate venture capital (CVC) arms of companies operating in the media and entertainment (M&E) space. I also estimate CARs associated with the launch of streaming services. I use the Fama French Five Factor model to model firms’ normal returns. I hypothesize that, because of the importance of technology and start-up investments in the M&E industry and the trend of growing CVC investment, investment announcements add to the value of the announcing firms. The overall estimated average CARs are not statistically significant for the given hypotheses. Some individual events show statistical significance, but do not contribute to the proposed hypotheses. The point estimates for average daily abnormal returns on the CVC arm investments for Sony are -2.63% over the [0,1] time horizon and -1.24% over the [-1,1] event horizon which are negative, but significant. The point estimate for daily abnormal returns for the launch date of Disney+ is 4.29% over [0,1] and 2.64% over [-1,1] and statistically significant. The CARs remain statistically insignificant over the [0,1] and [-1,1] event windows and when grouped by category of investment or by invest size. The point estimates for streaming platform launches were of higher magnitude than the average estimates for CVC investment announcements, with all events having CAR with magnitudes >2% in the [-1,1] event window and all events except for Netflix having CAR with magnitudes >2% in the [0,1] window. Point estimates also differentiated when considering deal size, as smaller deals resulted in negative point estimate values, and larger deals resulted in positive point estimates, apart from one large event, which had the most negative effect in the study on Sony.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.