Do Investors Benefit from Selective Access to Management?

Abstract

This paper examines whether selective access to corporate managers allows investors to revise their beliefs and execute profitable trades. We examine whether investors benefit from two potential opportunities for selective access at invitation-only investor conferences: one-on-one meetings with managers throughout the day and breakout sessions with managers after the webcast presentation. We find significant increases in trade sizes during the hours when firms provide offline access to investors, consistent with selective access providing investors with information they perceive to be valuable enough to trade upon. We also find significant potential trading gains concentrated primarily in three-day horizons after the conference for firms providing formal offline access, suggesting that selective access can lead to profitable trading opportunities. These trading gains are associated with analyst notes published during that period, indicating that such notes are one potential source of revelation to the broader market. Our evidence suggests that selective access to management conveys benefits to certain investors even in the post-Reg FD period.

Keywords: Regulation Fair Disclosure, Selective Disclosure, Conference Presentations, Informed Trading

JEL Classification: M41, K22