THE CHALLENGES OF INVESTOR COMMUNICATION - THE CASE OF CUC INTERNATIONAL, INC

• 成果类型: Article
• 署名作者: HEALY, PM; PALEPU, KG
• 署名单位: Harvard University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/0304-405X(94)00814-H
• 发表日期: 1995
• 页码: 111-140
• 关键词: INVESTOR COMMUNICATION; Accounting; financial policy

摘要

We examine investor communication issues using the experience of CUC International. CUC had difficulty convincing investors that its marketing outlays were profitable investments, leading to stock misvaluation over an extended period. To resolve this problem, CUC adopted an accounting change and then underwent a leveraged recapitalization. Subsequently, it accelerated recap debt repayments and initiated a stock repurchase. CUC's experience suggests that accounting reports are not always effective in investor communication. While financial signals are more effective, their impact is not as immediate as predicted by prior research. The CUC case suggests that investor communications is a rich area for future research.