Institutional Investor Inattention and Acquisition of Firm-specific Information During Conference Calls

Download or read book Institutional Investor Inattention and Acquisition of Firm-specific Information During Conference Calls written by Heejin Ohn and published by . This book was released on 2019 with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt: Earnings conference calls are salient sources of firm-specific information that provide both hard and soft information to investors. In this paper, I find that institutional investors participate more actively in earnings conference calls held by firms that receive less attention than their peers prior to conference calls. I construct a measure of relative inattention using the Bloomberg Heat Score, which captures the aggregate search activities of institutional investors at the firm level. Using a broad set of earnings conference call transcripts, I identify participants affiliated with institutional investors and their dialogue to examine the association between institutional investors' inattention and their activities during earnings conference calls. I show that institutional investors appear more often, ask more questions, and request more guidance in conference calls held by firms that receive less attention before the calls. Collectively, the results indicate that institutional investors compensate for the lack of firm-specific information with conference call participation, despite potential costs of publicly revealing their information acquisition.