Who Consumes Firm Disclosures? Evidence from Earnings Conference Calls

• In Event: Financial Analysts: Peers, Buy-Side and Institutions

Abstract

Using a set of proprietary records, we examine who consumes quarterly earnings conference calls and under which circumstances the calls are consumed. We find that there is significant interest in calls beyond investors and sell-side analysts and that demand varies in predictable ways according to the objectives of these users. We find that most of the variation in consumption is driven by firm related factors that are not readily influenced by managerial disclosure decisions in the short-run. Institutional investors who do not hold a position in the firm are the primary consumers of calls and they are more likely to hold positions in competitors and purchase the stock in the subsequent quarter. Many institutional investors that hold large positions only consume calls periodically. Overall, our investigation illuminates actual consumption of conference calls by different consumers.

Authors

• Jihwon Park, Harvard University Business School

• Anne Heinrichs, University of Chicago

• Eugene Soltes, Harvard Business School