Further Evidence on the Strategic Timing of Earnings News: Joint Analysis of Weekdays and Times of Day

Forthcoming in Journal of Accounting and Economics

51 Pages Posted: 23 Jul 2015 Last revised: 3 May 2016

Roni Michaely

[email protected] Tech, Cornell University

Amir Rubin

Simon Fraser University (SFU) - Beedie School of Business; Interdisciplinary Center (IDC) Herzliyah

Alexander Vedrashko

Simon Fraser University - Beedie School of Business

Date Written: July 10, 2015

Abstract

Using combinations of weekdays and times of day (before, during, and after trading hours) of earnings announcements, we examine whether managers attempt to strategically time these announcements. We document that the worst earnings news is announced on Friday evening and find robust evidence that only Friday evening announcements represent managers’ rational opportunistic behavior. Friday evening announcements are followed by insider trading in the direction of earnings news and the largest post-earnings announcement drift. Managers also attempt to reduce interaction with investors and hide more than just earnings news by announcing on Friday evening. We find that Friday evening announcements occur later in the evening than announcements on other evenings, firms have a reduced propensity to hold conference calls, and major firm restructuring events are relatively more likely to occur after Friday evening announcements.

Keywords: earnings announcements, timing, Friday evening, inattention, hiding news, post-earnings announcement drift

JEL Classification: G12, G14, L20, M41

Suggested Citation

Michaely, Roni and Rubin, Amir and Vedrashko, Alexander, Further Evidence on the Strategic Timing of Earnings News: Joint Analysis of Weekdays and Times of Day (July 10, 2015). Forthcoming in Journal of Accounting and Economics. Available at SSRN: https://ssrn.com/abstract=2634875 or http://dx.doi.org/10.2139/ssrn.2634875

Roni Michaely

[email protected] Tech, Cornell University ( email )

111 8th Avenue #302
New York, NY 10011
United States

Amir Rubin (Contact Author)

Simon Fraser University (SFU) - Beedie School of Business ( email )

8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada

Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 46150
Israel

Alexander Vedrashko

Simon Fraser University - Beedie School of Business ( email )

Beedie School of Business
8888 University Dr.
Burnaby, British Columbia V5A1S6
Canada
778-782-3471 (Phone)

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