Do Short Sellers Target Firms with Poor Earnings Quality? Evidence from Earnings Restatements |
| |
Authors: | Hemang Desai Srinivasan Krishnamurthy Kumar Venkataraman |
| |
Institution: | (1) Cox School of Business, Southern Methodist University, Dallas, TX 75275-0333, USA;(2) School of Management, SUNY – Binghamton University, Binghamton, NY 13902, USA |
| |
Abstract: | We study the behavior of short sellers around earnings restatements. We find that short sellers accumulate positions in restating
firms several months in advance of the restatement and subsequently unwind these positions after the drop in share price induced
by the restatement. The increase in short interest is larger for firms with high levels of accruals prior to restatement.
We document that heavily shorted firms experience poor subsequent performance and a higher rate of delisting. Overall, these
results suggest that the motive for short selling is, at least in part, related to suspect financial reporting and that short
sellers pay attention to information being conveyed by accruals.
|
| |
Keywords: | Short sellers Accruals Earnings quality Earnings restatements |
本文献已被 SpringerLink 等数据库收录! |
|