Talk about the Coronavirus Pandemic: Initial Evidence from Corporate Disclosures

Abstract

The novel Coronavirus disease (COVID-19) has become the world’s center of attention in 2020. In this paper, we examine firm disclosures of COVID-19 during the first quarter of 2020, a time when firms face tremendous uncertainty and have little guidance on what and how to disclose. We compare Coronavirus-related disclosures in SEC filings and earnings conference calls with the timeline of the spread of the disease and with information gathering and disseminating activities in Google searches and news articles. We find that initial corporate disclosures are driven by information demand, and firm managers are proactive in providing information to investors. Our topic modelling analysis shows that although firms recognize the massive impact of the pandemic on their operations, their disclosures in SEC filings are general and lack specifics. Finally, we find that analysts are proactive in raising questions regarding the impact of COVID-19 during the Q&A session of the conference calls, and that firm managers are quick to provide necessary disclosures in the presentation session as the pandemic develops.

Keywords: Coronavirus, COVID-19, Pandemics, Corporate disclosures, Earnings conference calls, SEC filings, Google Trends, News articles, Sentiment analysis, Textual analysis, Topic modelling

JEL Classification: M41