There is reliable evidence that managers smooth their reported earnings. If some firms manage earnings downwards (upwards) when they experience large positive (negative) earnings shocks and if investors have cognitive limits or are inattentive, then it is plausible that the post-earnings...

We analyze management's emphasis (i.e., prominence, frequency, and textual highlighting) of GAAP metrics within the narrative portion of earnings announcement press releases; we assess whether management uses emphasis opportunistically, informatively, or both. We find that management emphasizes...

We investigate whether increased investor demand for financial information arising from higher market uncertainty leads to greater media coverage of earnings announcements. We also investigate whether greater coverage during times of higher uncertainty further destabilizes financial markets...

In this paper I develop a noisy-rational-expectations model with a risk-neutral market maker and speculators who display prospect theory-inspired preferences and who can acquire private information about a public announcement prior to its release. Private information acquisition decreases the...

Does good news cover bad news? We show evidence from the Chinese stock market in which the fiscal year of a firm is always the same as the calendar year. Listed firms are required to announce their annual reports by the end of April, the same date of the deadline for announcements of first...

This article develops an agent-based model of security market pricing process, capable to capture main stylised facts. It features collective market pricing mechanisms based upon evolving heterogeneous expectations that incorporate signals of security issuer fundamental performance over time....

We empirically examine the joint predictions of the pecking order theory and the theory of time-varying asymmetric information regarding the timing of security offerings around information disclosures. We analyze loan originations and bond offerings around earnings announcements and compare them...

This study examines the effect of option volume relative to stock volume (O/S) on market response to earnings surprises. The market reaction per unit of earnings surprise is lower for firms that have high O/S prior to earnings announcement than for firms with low O/S prior to earnings...

Research documents that linguistic tone is incrementally informative about stock returns. What remains a puzzle is the mechanism by which investors can assess its credibility. We examine whether contemporaneous information in management earnings forecasts serves as a timely alternative to ex...

How does a public announcement about a company exploring its potential sale or merger (“strategic alternatives”) affect the company and its shareholders? This study provides the first look at some of the positive and negative consequences to this unique disclosure of strategic alternatives....