Inside the 'Black Box' of Private In-House Meetings

51 Pages Posted: 11 Jul 2017 Last revised: 29 Nov 2017

Robert M. Bowen

Univeristy of San Diego - School of Business; University of Washington - Foster School of Business; Foster School of Business ; University of San Diego - Department of Accountancy

Shantanu Dutta

The University of Ontario Institute of Technology (UOIT)

Songlian Tang

East China University of Science and Technology (ECUST)

PengCheng Zhu

University of San Diego

Date Written: July 22, 2017

Abstract

We examine information content and related insider trading around private in-house meetings between corporate insiders and investors and analysts. We use a hand-collected dataset of approximately 17,000 private meeting summary reports of Shenzhen Stock Exchange firms over 2012–2014. We find that these private meetings are informative and corporate insiders conducted over one-half of their stock sales (totaling $8.7 billion) around these meetings. Some insiders time their transactions and earn substantial gains by selling (purchasing) relatively more shares before bad (good) news disclosures while postponing selling (purchasing) when good (bad) news is to be disclosed in the meeting. Finally, we conduct a content analysis of published meeting summary reports and find that the tone in these reports is associated with stock market reactions around (1) private meetings themselves, (2) subsequent public release of private meeting details, (3) subsequent earnings announcements and (4) future stock performance.

Keywords: disclosure, private meetings, private information, insider trading, content analysis

JEL Classification: G14, G18, M41

Suggested Citation

Bowen, Robert M. and Dutta, Shantanu and Tang, Songlian and Zhu, Phil, Inside the 'Black Box' of Private In-House Meetings (July 22, 2017). Review of Accounting Studies, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2997357 or http://dx.doi.org/10.2139/ssrn.2997357

Robert M. Bowen

Univeristy of San Diego - School of Business ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

HOME PAGE: http://https://www.sandiego.edu/business/undergraduate/accountancy/biography.php?profile_id=1799

University of Washington - Foster School of Business ( email )

Box 353226
University of Washington
Seattle, WA 98195-3226
United States

HOME PAGE: http://https://foster.uw.edu/faculty-research/directory/robert-bowen/

Foster School of Business ( email )

557 Paccar Hall
Seattle, WA 98195
United States
(206) 543-4569 (Phone)
(206) 685-9392 (Fax)

HOME PAGE: http://faculty.washington.edu/rbowen/

University of San Diego - Department of Accountancy ( email )

223 Olin Hall
5998 Alcalá Park
San Diego, CA 92110
United States
619.260.2385 (Phone)

HOME PAGE: http://www.sandiego.edu/business/directory/biography.php?id=1232

Shantanu Dutta

The University of Ontario Institute of Technology (UOIT) ( email )

2000 Simcoe Street North
Oshawa, Ontario L1H 7K4
Canada

Songlian Tang

East China University of Science and Technology (ECUST) ( email )

Shanghai
China

Phil Zhu (Contact Author)

University of San Diego ( email )

5998 Alcala Park
San Diego, CA 92110
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
189
rank
148,926
Abstract Views
850
PlumX