Scant evidence has amassed about how a Wells notice might affect stock prices. We find that prices fall significantly in the three days around a first-time Wells disclosure and, for disclosures that involve subsequent timely litigation, stock prices drop more sharply, by more than three percent....

Until 2001, certain stock acquisitions could be accounted for as pooling-of-interests. There were concerns that pooling was associated with earnings fixation and weak corporate governance. I investigate the cross-sectional variation in the purchase-pooling choice and its association with...

This paper extends the study of Herrmann and Thomas (2005) on granularity in analyst forecasts at multiples of nickels and finds that forecasts at multiples of nickels are more optimistic, and induce weaker market responses. Granularity in analyst forecasts combined with managers’ incentive to...

This paper both confirms and extends the value relevance of information technology (IT) announcements found by K.S. Im et al. (2001) and B.L. Dos Santos et al. (1993). We extend their work by proposing that an overarching construct, the strategic IT role in an industry, accounts for the factors...

I document a recent increase in the usefulness of quarterly earnings announcements. I measure the usefulness of earnings announcements as the percentage of total annual excess returns that occurs on or around quarterly earnings announcements. In the main sample, approximately 18.4% of...

In this study we examine changes in the precision and the commonality of information contained in individual analysts' earnings forecasts, focusing on changes around earnings announcements. Using the empirical proxies suggested by the Barron et al. (1998) model that are based on the...

We model limited attention as incomplete usage of publicly available information. Informed players decide whether or not to disclose to observers who sometimes neglect either disclosed signals or the implications of non-disclosure. In equilibrium observers are unrealistically optimistic,...

Option market activity increases by more than 10 percent in the four days before quarterly earnings announcements. We show that the direction of this pre-announcement trading foreshadows subsequent earnings news. Specifically, we find option traders initiate a greater proportion of long (short)...

This paper examines the role of earnings quality in the future performance of firms that marginally miss or beat analysts' forecasts. We focus primarily on two groups of firms: those that miss their forecast but appear not to have attempted to exceed it by managing earnings, and those that...

This study investigates security analysts' reactions to public management guidance and assesses whether managers successfully guide analysts toward beatable earnings targets. We use a panel dataset between 1995 and 2001 to examine the fiscal-quarter-specific determinants of management guidance...