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The Strategic Timing of Corporate Disclosures

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  • Gennotte, Gerard
  • Trueman, Brett

Abstract

An important element of a firm's disclosure strategy is the timing of its mandatory public announcements. In this article, two aspects of disclosure timing are examined. The first is the intraday timing of earnings accouncements. It is demonstrated here that, under reasonable conditions, market prices reflect better the valuation implications of an earnings announcement when it is made during trading hours rather than after the market has closed. This implies that managers should prefer to release earnings with positive (negative) implications for firm value during (after) trading hours. The second issue examined is the sequencing of multiple corporate disclosures. It is shown that if the announcements have positive (negative) implications for firm value, managers should prefer to make them separately (simultaneously), as market prices better reflect the valuation implications of multiple announcements when they are made at different times. Article published by Oxford University Press on behalf of the Society for Financial Studies in its journal, The Review of Financial Studies.

Suggested Citation

  • Gennotte, Gerard & Trueman, Brett, 1996. "The Strategic Timing of Corporate Disclosures," Review of Financial Studies, Society for Financial Studies, vol. 9(2), pages 665-690.
  • Handle: RePEc:oup:rfinst:v:9:y:1996:i:2:p:665-90
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    Citations

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    Cited by:

    1. David Abad & José Yagüe & Sonia Sanabria, 2005. "Liquidity And Information Around Annual Earnings Announcements: An Intraday Analysis Of The Spanish Stock Market," Working Papers. Serie EC 2005-16, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    2. Breu, Christopher & Schönbohm, Avo & Löcher, Markus, 2015. "Impact of investor presentations on share prices: Evidence from DAX 30 companies from 2010-2012," Working Papers 88, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
    3. Benjamin Segal & Dan Segal, 2016. "Are managers strategic in reporting non-earnings news? Evidence on timing and news bundling," Review of Accounting Studies, Springer, vol. 21(4), pages 1203-1244, December.
    4. Jiang, Christine X. & Likitapiwat, Tanakorn & McInish, Thomas H., 2012. "Information Content of Earnings Announcements: Evidence from After-Hours Trading," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 47(06), pages 1303-1330, December.
    5. Iqbal, Javed & Farooqi, Faraz Ahmed, 2011. "Stock price reaction to earnings announcement: the case of an emerging market," MPRA Paper 30865, University Library of Munich, Germany, revised 10 May 2011.
    6. Viral V. Acharya & Peter DeMarzo & Ilan Kremer, 2011. "Endogenous Information Flows and the Clustering of Announcements," American Economic Review, American Economic Association, vol. 101(7), pages 2955-2979, December.
    7. Xin Yu & Peng Zhang & Ying Zheng, 2015. "Corporate Governance, Political Connections, and Intra-Industry Effects: Evidence from Corporate Scandals in China," Financial Management, Financial Management Association International, vol. 44(1), pages 49-80, March.
    8. Chen, Sheng-Syan & Chou, Robin K. & Lee, Yun-Chi, 2011. "Bidders' strategic timing of acquisition announcements and the effects of payment method on target returns and competing bids," Journal of Banking & Finance, Elsevier, vol. 35(9), pages 2231-2244, September.
    9. Darren Filson & Karyn Williams, 2001. "The Impact of E-Commerce Strategies on Firm Value: Lessons from Amazon.com," Claremont Colleges Working Papers 2001-25, Claremont Colleges.
    10. Leonardo Fernandez, 2012. "Price Discovery, Investor Distraction and Analyst Recommendations Under Continuous Disclosure Requirements in Australia," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 3.
    11. Cuny, Christine, 2016. "Voluntary disclosure incentives: Evidence from the municipal bond market," Journal of Accounting and Economics, Elsevier, vol. 62(1), pages 87-102.
    12. Zolotoy, L., 2008. "Empirical essays on the information transfer between and the informational efficiency of stock markets," Other publications TiSEM 2a2652c6-1060-4622-8721-8, Tilburg University, School of Economics and Management.
    13. Darren Filson, 2002. "The Impact of E-Commerce Strategies on Firm Value: Lessons from Amazon.com and its Early Competitors," Claremont Colleges Working Papers 2003-06, Claremont Colleges.
    14. Grenadier, Steven R. & Malenko, Andrey & Strebulaev, Ilya A., 2014. "Investment busts, reputation, and the temptation to blend in with the crowd," Journal of Financial Economics, Elsevier, vol. 111(1), pages 137-157.
    15. Steven Grenadier & Andrey Malenko & Ilya A. Strebulaev, 2012. "Investment Busts, Reputation, and the Temptation to Blend in with the Crowd," NBER Working Papers 17945, National Bureau of Economic Research, Inc.

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