Media abnormal tone, earnings announcements, and the stock market

Authors: David Ardia, Keven Bluteau, Kris Boudt

Journal of Financial Markets, Volume 61, November 2022, 100683
arXiv: 2110.10800v1 - DOI (q-fin.GN)
Forthcoming in Journal of Financial Markets
License: CC BY-NC-ND 4.0

Abstract: We conduct a tone-based event study to examine the aggregate abnormal tone dynamics in media articles around earnings announcements. We test whether they convey incremental information that is useful for price discovery for nonfinancial S&P 500 firms. The relation we find between the abnormal tone and abnormal returns suggests that media articles provide incremental information relative to the information contained in earnings press releases and earnings calls.

Submitted to arXiv on 20 Oct. 2021

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