Short sales, price pressure, and the stock price response to convertible bond calls

The announcement of a convertible bond call is associated with an average contemporaneous abnormal stock price decline of 1.75% and an ensuing price recovery in the conversion period. A price fall and the subsequent recovery suggest price pressure as the explanation for the announcement effect. However, in general the option to convert is not exercised early and hence, the increase in the number of shares outstanding does not occur at the announcement date. Instead, this paper argues and provides evidence that hedging-induced short selling causes at least part of the short-run price pressure.     

In search of meaning: Lessons,resources and next steps for computational analysis of financial discourse

We critically assess mainstream accounting and finance research applying methods from computational linguistics (CL) to study financial discourse. We also review common themes and innovations in the literature and assess the incremental contributions of studies applying CL methods over manual content analysis. Key conclusions emerging from our analysis are: (a) accounting and finance research is behind the curve in terms of CL methods generally and word sense disambiguation in particular; (b) implementation issues mean the proposed benefits of CL are often less pronounced than proponents suggest; (c) structural issues limit practical relevance; and (d) CL methods and high quality manual analysis represent complementary approaches to analyzing financial discourse. We describe four CL tools that have yet to gain traction in mainstream AF research but which we believe offer promising ways to enhance the study of meaning in financial discourse. The four tools are named entity recognition (NER), summarization, semantics and corpus linguistics.     

Conference Calls and Stock Price Volatility in the Post‐Reg FD Era

Past research has documented that the utilisation of conference calls is greater in the high tech sector than in other industries. Do high tech firms benefit from that? This study attempts to answer this question by examining the impact of ‘post‐Reg FD’ conference calls on the price volatility of high tech firms listed in the US market. We find evidence that more open conference calls results in lower idiosyncratic volatility.     

The Evolving Disclosure Landscape: How Changes in Technology,the Media,and Capital Markets Are Affecting Disclosure

Recent changes in technology and the media are causing significant changes in how capital markets assimilate and respond to information. We identify important themes in the disclosure literature and use this as a framework to discuss the conference papers that appear in this volume. These papers examine how managers’ disclosure practices are being affected by changes in technology, the media, and capital markets. While this work makes important progress, we discuss how continuing technological change and the emergence of new forms of media offer further opportunities for research on the role of disclosure in capital markets.     

Operating Performance and Stock Returns of Firms Calling Convertible Preferred Stocks

Abstract:   Using methodologies developed by Barber and Lyon (1996 and 1997 ), we examine the long‐run operating performance and stock returns of firms around in‐the‐money calls of convertible preferred stock. Our study intends to be a direct test of the hypothesis that managers call in‐the‐money convertibles when they view a decline in the firms' performance. We find no evidence that calling firms underperform non‐calling benchmark firms. On the contrary, we find mild evidence that the post‐call operating performance of calling firms is better than a carefully selected group of benchmark firms and call firms' post‐call stock returns are no worse than benchmark firms.     

Fair Value‐related Information in Analysts’ Decision Processes: Evidence from the Financial Crisis

We use a sample of conference calls and analyst research reports from international banks to examine how financial analysts request and communicate fair value‐related information in their valuation process. We find that analysts devote considerable attention to fair value‐related topics. Most of the conference call questions and references in research reports pertain to fair value reclassifications and fair value changes of liabilities resulting from banks’ own credit risk. The accounting impact of these one‐time effects during the financial crisis and a lack of corresponding firm disclosures help to explain the prevalence of these two topics. The content of the questions and references suggests that analysts have different motives for their interest in fair value‐related information. While some analysts adjust reported earnings for unrecognised fair value changes of reclassified assets, most of the observed analysts exclude banks’ own credit risk effects from reported earnings. Thus, the use of fair value‐related information varies substantially across analysts and across instruments.     

浅谈两类常见掉话的产生原因及相应解决方法

本文介绍由于覆盖原因和邻区原因造成掉话的原因分析,以及这两类原因造成掉话的解决方案,通过合理调整覆盖、优化邻区等调整措施,重点解决由于覆盖原因和邻区原因造成的掉话。     

The Structure of Voluntary Disclosure Narratives: Evidence from Tone Dispersion

We examine tone dispersion, or the degree to which tone words are spread evenly within a narrative, to evaluate whether narrative structure provides insight into managers’ voluntary disclosures and users’ responses to those disclosures. We find that tone dispersion is associated with current aggregate and disaggregated performance and future performance, managers’ financial reporting decisions, and managers’ incentives and actions to manage perceptions. Furthermore, we find that tone dispersion is associated with analysts’ and investors’ responses to conference call narratives. Our results suggest that tone dispersion both reflects and affects the information that managers convey through their narratives.