Business Commons^™

Earnings Conference Calls And Lazy Prices, Chuancai Zhang

Theses and Dissertations--Accountancy

Changes to the language and construction of financial reports are indicative of firms’ future returns and operations. Investors, however, are often inattentive to these changes; consequently, price reactions to these changes are delayed—resulting in “lazy” prices. This study explores two possible channels through which earnings conference calls may mitigate lazy prices: (1) the topic overlap channel and (2) the comparison language channel. Specifically, I examine whether the topic overlap between conference call transcripts and 10K/10Q filings or the comparison language used on earnings conference call transcripts helps investors understand the nature of the overlapped topics and triggers investors’ attention to …