We measure the change in value to sellers and buyers of divested high-tech assets. Sellers and buyers experience favorable announcement effects in response to high-tech divestitures. However, buyers of divested high-tech assets experience more favorable announcement effects than sellers, which is opposite of the related research findings on other types of divestitures. Based on a cross-sectional analysis, the announcement effects for sellers of high-tech assets are more favorable when there is an investment bank advisor, the transaction price is disclosed, and the size of the divestiture is large. The announcement effects for buyers of high-tech assets were also more favorable when there was an investment bank advisor during the tech-bubble period. Overall, the results suggest that the stock price behavior in response to divestitures of high-tech assets is distinctly different from that of other types of divestitures.
