This paper addresses the role of security analysts in the short-term market reaction to the publication of a going -concern (GC) modified audit report. We find that the 3-day mean abnormal return associated with the GC announcement is at least -6.9% for firms with analyst coverage in comparison...

This paper asks whether the stocks of bankrupt firms are correctly priced, and explores who trades the stocks of these firms, and why. Our sample consists of firms that enter into Chapter 11 and remain listed on the NYSE, AMEX, and NASDAQ post-filing. We show that these stocks are heavily traded...