ACCOUNTING Te media response to a loss of


analyst coverage Review of Accounting Studies, 29, December 2024 LINK TO PAPER LINK TO NICHOLAS GUEST VIDEO


NICHOLAS GUEST ASSISTANT PROFESSOR


Samuel Curtis Johnson Graduate School of Management


Cornell SC Johnson College of Business Cornell University


Co-authors • Nicholas Guest


Assistant Professor, Samuel Curtis Johnson Graduate School of


Management, Cornell SC Johnson College of Business, Cornell University • Jaewoo Kim, University of Oregon, Eugene


Summary Tis paper examines how the media responds to the loss of analyst coverage


resulting from brokerage mergers and closures. Te authors study the connec- tion between analyst coverage and media coverage, which are both integral to many firms’ information environments. Tey find some evidence of an overall decrease in media coverage of affected firms, when analysts are provided as a useful information source for the media. However, media coverage during the earnings announcement significantly increases, consistent with the media switching their efforts to events with more non-analyst (e.g., firm-provided) information available.


Both the overall decrease and the shift towards the earnings announcement are more pronounced for journalists who are more likely to rely on analysts and for firms that provide more information to supplement their earnings announcement (e.g., bundled guidance and investor relations). Overall this paper suggests that the loss of analyst coverage increases the costs of sup- plying media coverage, resulting in a decrease in media coverage as well as a greater focus on the earnings announcement within the remaining coverage.


CONTENTS TO MAIN


| RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2024 EDITION


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