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Why Don't Analysts Always Value Earnings Conference Calls?

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Title:Why Don't Analysts Always Value Earnings Conference Calls?
Authors:Sudipta Basu
Zhongnan Xiang
Keywords:Private Information
Analyst Forecast Timing
Disclosure Regulation
Conference Calls
Date Issued:15 Aug 2020
Abstract:We compare analyst forecasts before earnings releases, between earnings releases and conference calls, and after conference calls, and unexpectedly find that the forecasts do not become more accurate or less dispersed around conference calls. We propose and show that analysts ignore potential information in conference calls if they got prior access to private information. Analyst forecasts between earnings releases and conference calls are associated with less market movement during conference calls. Our results suggest that some analysts have superior information access before a few open conference calls. We show that public disclosure is sometimes preempted by private information channels and implicitly question the effectiveness of disclosure regulation.
Appears in Collections: 08 Financial Accounting 1: Stock Analysts/Equity Valuation

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