Overconfident CEOs are frequently criticized for making value-destroying corporate acquisitions in which they excessively acquire and overpay. We argue that overconfident CEOs often create value and deliver better performance in the acquisition waves given that the motivation and the requirement for action speed for acquisitions that occur in waves are different from those in other acquisition contexts. Specifically, we hypothesize and find that overconfident CEOs are more likely to capture preemption opportunities by acting earlier in acquisition waves, and such rapid moves enable overconfident CEOs to seize high-quality targets or targets with cospecialized assets with lower costs, leading to better acquisition performance. In addition, we find that in acquisition waves, organizational acquisition experience hampers value-add because it reduces overconfident CEO action speed, and associated returns to acquisitions. Contributions to the CEO overconfidence and acquisitions literatures are discussed.
