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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | When Managers Change Their Tone, Analysts and Investors Change Their Tune |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Financial Analysts Journal |
| Publisher | Taylor & Francis |
| Geographical Reach | international |
| ISSN | 1938-3312 |
| Volume | 76 |
| Number | 2 |
| Page Range | 47 - 69 |
| Date | 2020 |
| Abstract Text | The negativity of managerial word choice (managerial tone) on conference calls is a telltale indicator of a company’s future. Specifically, increases in negativity, what we term bleak tone changes, strongly predict lower future earnings and greater uncertainty. However, decreases in negativity only weakly predict the opposite. To isolate the explanatory power of managerial tone, we control for negativity changes in the earnings press release and analysts' questions. Analysts and investors under-react when they extract value-relevant information from negativity changes. Consequently, a negativity-based trading strategy generates abnormal returns. |
| Free access at | DOI |
| Related URLs | |
| Digital Object Identifier | 10.1080/0015198X.2019.1707592 |
| Other Identification Number | merlin-id:9341 |
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