Are investors listening? An examination of CEO podcast appearances

Abstract

While a vast stream of research explores the market consequences of firm communication, it generally focuses on channels where material non-public information can legally be disclosed (i.e., channels compliant with Regulation FD). In recent times, however, a growing number of CEOs are communicating in a channel where this is not necessarily the case: podcasts. We find that CEO podcast appearances contribute to market activity, both in terms of share turnover and absolute returns. Because these pervasive market consequences are seemingly at odds with the non-Reg FD compliant nature of podcasts, we also examine why investors might listen and trade. We predict and find evidence supporting three non-mutually exclusive hypotheses: CEO podcast appearances (i) lower processing costs; (ii) heighten investor focus on company products or brands; and (iii) increase manager visibility. These findings provide important insights on a rising communication channel, podcasts, and demonstrate that non-Reg-FD channels can also have important market consequences.

Keywords: Podcasts, CEO, Non-Reg-FD disclosure, Investor Trading