The Dark Side of Investor Conferences: Evidence of Managerial Opportunism

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See all articles by Brian J. Bushee

Brian J. Bushee

University of Pennsylvania - The Wharton School

Daniel J. Taylor

The Wharton School, University of Pennsylvania

Christina Zhu

University of Pennsylvania - The Wharton School

Date Written: September 29, 2020

Abstract

While the shareholder benefits of investor conferences are well-documented, evidence on whether these conferences facilitate managerial opportunism is scarce. In this paper, we examine whether managers opportunistically exploit heightened attention around the conference to "hype" the stock. Consistent with hype, we find that managers increase the quantity of voluntary disclosure over the ten days prior to the conference, and that these disclosures increase prices to a greater extent than post-conference disclosures. Investigating managers’ incentives for pre-conference disclosure, we find that the increase in pre-conference disclosure is more pronounced when insiders sell their shares immediately prior to the conference. In those circumstances where pre-conference disclosures coincide with pre-conference insider selling, we find evidence of a significant return reversal: large positive returns before the conference, and large negative returns after the conference. Collectively, our findings are consistent with some managers hyping the stock prior to the conference and selling their shares at inflated prices.

Keywords: Investor conferences, voluntary disclosure, private information, insider trading, opportunism

JEL Classification: G34, J33, K31, M52

Suggested Citation

Bushee, Brian J. and Taylor, Daniel and Zhu, Christina, The Dark Side of Investor Conferences: Evidence of Managerial Opportunism (September 29, 2020). Available at SSRN: https://ssrn.com/abstract=

Brian J. Bushee

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-4872 (Phone)
215-573-2054 (Fax)

Daniel Taylor

The Wharton School, University of Pennsylvania ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Christina Zhu (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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