The Media Response to a Loss of Analyst Coverage

48 Pages Posted: 8 Mar 2019 Last revised: 22 Dec 2022

See all articles by Nicholas M. Guest

Nicholas M. Guest

Cornell University - Samuel Curtis Johnson Graduate School of Management

Jaewoo Kim

University of Oregon - Department of Accounting

Date Written: December 20, 2022

Abstract

This paper examines how the media responds to the loss of analyst coverage resulting from brokerage mergers and closures. We find some evidence of an overall decrease in media coverage of affected firms, consistent with analysts serving as a useful information source for the media. However, media coverage during the earnings announcement (EA) significantly increases, consistent with the media switching their efforts to events with more non-analyst (e.g., firm-provided) information available. Both the overall decrease and the shift towards the EA are more pronounced for journalists who are more likely to rely on analysts and for firms that provide more information to supplement their EA (e.g., guidance and investor relations). Overall, our paper suggests that the loss of analyst coverage increases the costs of supplying media coverage, resulting in a decrease in media coverage as well as a greater focus on the EA within the remaining coverage.

Keywords: financial media, sell-side analysts, intermediary, news, earnings, sentiment

JEL Classification: G14, G24, G29, G30, M41

Suggested Citation

Guest, Nicholas M. and Kim, Jaewoo, The Media Response to a Loss of Analyst Coverage (December 20, 2022). Available at SSRN: https://ssrn.com/abstract=3337116 or http://dx.doi.org/10.2139/ssrn.3337116

Nicholas M. Guest (Contact Author)

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

342 Sage Hall
Ithaca, NY 14853
United States

Jaewoo Kim

University of Oregon - Department of Accounting ( email )

Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States

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