Investors are often concerned that managers might hide negative information in filings. With advances in textual analysis and widespread document availability, individuals can now easily search for phrases that might be red flags indicating questionable behavior. We examine the impact of 13...

Form S-1 is the first SEC filing in the initial public offering (IPO) process. The tone of the S-1, in terms of its definitiveness in characterizing the firm's business strategy and operations, should affect investors' ability to value the IPO. We find that IPOs with high levels of uncertain...

Defining and measuring readability in the context of financial disclosures becomes important with the increasing use of textual analysis and the SEC's plain English initiative. We propose defining readability as the effective communication of valuation relevant information. The Fog Index — the...

We study the profitability of a strategy based on the earnings surprises. First, we attempt to identify variables, in addition to earnings surprise, that will improve our ability to predict post-earnings announcement returns. Second, we test a strategy based on the SUE effect using a...

Public companies in the United States are required to file annual reports (Form 10-K) that, among other things, disclose the risk factors that might negatively affect the price of their stock. The risk of a pandemic was well known before the current crisis and we now know the impact for...

Do investors quickly and rationally react to the content of oil-related news articles revealing supply and demand information? Our paper creates a novel keyword list of 130 oil-related words and modifiers that enable investors/researchers to measure the information content of oil stories. We...

Most financial security trading venues prioritize competing liquidity providers with price-time priority; entities displaying the best-priced limit order earliest trade with the next opposite-sided liquidity-demanding order. The New York Stock Exchange (NYSE) rule putting traders “on parity”...

The notion of a global currency is a debate set aside in the past decade as the abstraction saw little potential for realization in a world with heterogeneous governments unwilling to sacrifice seigniorage for optimal design. The technical capability of creating digital currencies, independent...

Previous research uses negative word counts to measure the tone of a text. We show that word lists developed for other disciplines misclassify common words in financial text. In a large sample of 10 Ks during 1994 to 2008, almost three-fourths of the words identified as negative by the widely...

Relative to quantitative methods traditionally used in accounting and finance, textual analysis is substantially less precise. Thus, understanding the art is of equal importance to understanding the science. In this survey we describe the nuances of the method and, as users of textual analysis,...