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...

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...

This study examines whether firms’ political activism induces bias in the media’s coverage of earnings announcements and how such coverage impacts markets. We infer firm political ideology based on employee political contributions, and identify firm and manager characteristics associated...

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...