Selective Publicity and Stock Prices

• 成果类型: Article
• 署名作者: Solomon, David H.
• 署名单位: University of Southern California
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2012.01726.x
• 发表日期: 2012
• 页码: 598-636
• 关键词: earnings management; cross-section; FULLY REFLECT; media; INFORMATION; performance; coverage; news

摘要

I examine how media coverage of good and bad corporate news affects stock prices, by studying the effect of investor relations (IR) firms. I find that IR firms spin their clients news, generating more media coverage of positive press releases than negative press releases. This spin increases announcement returns. Around earnings announcements, however, IR firms cannot spin the news and their clients returns are significantly lower. This pattern is consistent with positive media coverage increasing investor expectations, creating disappointment around hard information. Using reporter connections and geographical links, I argue that IR firms causally affect both media coverage and returns.