The Strategic Timing of Corporate Disclosures

REVIEW OF FINANCIAL STUDIES, Vol. 9 No. 2, Summer 1996

Posted: 30 Jun 1998

See all articles by Gerard Gennotte

Gerard Gennotte

Long Term Capital Management

Brett Trueman

University of California, Los Angeles (UCLA) - Anderson School of Management

Abstract

An important element of a firm's disclosure strategy is the timing of its mandatory public announcements. In this paper, two aspects of disclosure timing are examined. The first is the intraday timing of earnings announcements. It is demonstrated here that, under reasonable conditions, market prices reflect better the valuation implications of an earnings announcement when it is made during trading hours rather than after the market has closed. This implies that managers should prefer to release earnings with positive (negative) implications for firm value during (after) trading hours. The second issue examined is the sequencing of multiple corporate disclosures. It is shown that if the announcements have positive (negative) implications for firm value, managers should prefer to make them separately (simultaneously), as market prices better reflect the valuation implications of multiple announcements when they are made at different times.

JEL Classification: D82, G10, M41

Suggested Citation

Gennotte, Gerard and Trueman, Brett, The Strategic Timing of Corporate Disclosures. REVIEW OF FINANCIAL STUDIES, Vol. 9 No. 2, Summer 1996. Available at SSRN: https://ssrn.com/abstract=7377

Gerard Gennotte

Long Term Capital Management

Greenwich, CT 06830
United States

Brett Trueman (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
310-825-4720 (Phone)
310-267-2193 (Fax)

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