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Tips and Tells from Managers: How Analysts and the Market Read Between the Lines of Conference Calls / Marina Druz, Alexander F. Wagner, Richard J. Zeckhauser.
- Format:
- Book
- Author/Creator:
- Druz, Marina.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20991.
- NBER working paper series no. w20991
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Tips and Tells from Managers
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2015.
- Summary:
- Stock prices react significantly to the tone (negativity of words) managers use on earnings conference calls. This reaction reflects reasonably rational use of information. "Tone surprise" - the residual when negativity in managerial tone is regressed on the firm's recent economic performance and CEO fixed effects - predicts future earnings and analyst uncertainty. Prices move more, as hypothesized, in firms where tone surprise predicts more strongly. Experienced analysts respond appropriately in revising their forecasts; inexperienced analysts overreact (underreact) to tone surprises in presentations (answers). Post-call price drift, like post-earnings announcement drift, suggests less-than-full-use of information embedded in managerial tone.
- Notes:
- Print version record
- February 2015.
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