Harnessing media attention: Strategic press releases around earnings announcements

52 Pages Posted: 29 Aug 2014 Last revised: 31 Aug 2017

See all articles by Wai-Man Liu

Wai-Man Liu

Australian National University

Phong T. H. Ngo

Australian National University (ANU)

Qiaoqiao Zhu

Australian National University (ANU) - College of Business and Economics; Financial Research Network (FIRN)

Date Written: August 25, 2017

Abstract

We document that firms are 80% more likely to issue non-earnings press releases during the earnings announcement period when delivering extremely negative earnings news. These non-earnings press releases are insufficient to improve negative announcement returns in isolation. However, if the media covers the non-earnings press release, announcement returns increase by about 6% and are sustained afterward. These findings are concentrated in smaller firms. Our interpretation is that, as an alternative to manipulating earnings, firms focusing on short-term return performance strategically time press releases to maximise the likelihood of beneficial media coverage and thus minimise the impact of negative earnings news.

Keywords: strategic press releases, media coverage, earnings announcements

JEL Classification: G14, G34, M41

Suggested Citation

Liu, Wai-Man and Ngo, Phong T. H. and Zhu, Qiaoqiao, Harnessing media attention: Strategic press releases around earnings announcements (August 25, 2017). Paris December 2014 Finance Meeting EUROFIDAI - AFFI Paper, Available at SSRN: https://ssrn.com/abstract=2488921 or http://dx.doi.org/10.2139/ssrn.2488921

Wai-Man Liu

Australian National University ( email )

Canberra, Australian Capital Territory 2601
Australia

HOME PAGE: http://https://www.cbe.anu.edu.au/about/staff-directory/?profile=Wai-Man%20(Raymond)-Liu

Phong T. H. Ngo (Contact Author)

Australian National University (ANU) ( email )

RSFAS, College of Business and Economics
Australian National University
Canberra, Australian Capital Territory 0200
Australia
+61 2 6125 1079 (Phone)

HOME PAGE: http://cbe.anu.edu.au/people/rsfas/phong-ngo/

Qiaoqiao Zhu

Australian National University (ANU) - College of Business and Economics ( email )

Canberra, Australian Capital Territory 2601
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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