Stock price response to new‐ CEO  earnings news | Zendy

Geertsema Paul G. | Zendy; Lont David H. | Zendy; Lu Helen | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Premium

Stock price response to new‐ CEO earnings news

Author(s) -

Geertsema Paul G.,

Lont David H.,

Lu Helen

Publication year - 2018

Publication title -

accounting and finance

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.645

H-Index - 49

eISSN - 1467-629X

pISSN - 0810-5391

DOI - 10.1111/acfi.12239

Subject(s) - honeymoon , earnings , stock (firearms) , stock price , monetary economics , earnings quality , business , economics , accounting , accrual , series (stratigraphy) , mechanical engineering , paleontology , political science , law , biology , engineering

New‐ CEO earnings news exhibits asymmetric effects on stock prices. Stock prices rise more on good earnings news announced by firms with new CEO s compared with those with established CEO s. By contrast, stock prices tend to fall by a smaller amount on bad earnings news for new CEO s. Both the new‐ CEO quality effect and the new‐ CEO honeymoon effect are more pronounced for CEO s appointed during challenging situations. The new‐ CEO quality effect is stronger for firms followed by fewer analysts, while the honeymoon effect is stronger for firms followed by more analysts – illustrating the importance of a transparent information environment.

This content is not available in your region!

Continue researching here.

Having issues? You can contact us here

Accelerating Research