Below, a continuation of our bibliography of thought-provoking articles on issues related to right-sizing regulation, staying private versus going public, and related topics:

Undue Prominence?

Lin Cheng, Darren Roulstone, and Andrew Van Buskirk consider whether the manner in which information is placed in public company disclosures influences investors’ reactions.  Their paper, “Are Investors Influenced by the Order of Information in Earnings Press Releases?” finds that generally positive information is given more prominence in press releases.  Positive information often appears first rather than being dispersed throughout a release.  The placement of the information conditions investor response.  Given the SEC’s focus on undue prominence given to non-GAAP measures now, such measures would not be emphasized at the expense of GAAP measures.  However, other information may be subject to the same approach by reporting companies.  On a positive note, the study finds that investors do not place undue reliance on the positive information emphasized by management.

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