This paper investigates the market’s reaction to 151 strategic plan presentations given at the Milan Stock Exchange between January 2001 and December 2006. The purpose is twofold: on the one hand, to understand if investors find strategic plan presentations informative; on the other hand, to study if firms benefit from presenting their strategic plans to analysts and investors. Abnormally high levels of volatility and trading volumes after the presentations indicate that investors find strategic plan presentations informative, especially when these presentations are given by small firms. Yet, the limited price response around the presentation dates suggests that firms benefit from presenting their strategic plans only under certain conditions (they are small and/or their forecasts exceed market expectations).
Disclosing Strategy: Stock Market’s Reaction to Strategic Plan Presentations
GABBIONETA, CLAUDIA
2010-01-01
Abstract
This paper investigates the market’s reaction to 151 strategic plan presentations given at the Milan Stock Exchange between January 2001 and December 2006. The purpose is twofold: on the one hand, to understand if investors find strategic plan presentations informative; on the other hand, to study if firms benefit from presenting their strategic plans to analysts and investors. Abnormally high levels of volatility and trading volumes after the presentations indicate that investors find strategic plan presentations informative, especially when these presentations are given by small firms. Yet, the limited price response around the presentation dates suggests that firms benefit from presenting their strategic plans only under certain conditions (they are small and/or their forecasts exceed market expectations).
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