We exploit the exogenous shock of a 2005 U.S. Supreme Court decision on securities class action loss causation requirements to examine two ways that firms bundle information with restatements: “positive bundling” of good news and “noise bundling” of additional bad news. We find that positive bundling offsets price declines and results in less litigation. In contrast, noise bundling magnifies price declines, but nevertheless deters litigation by confounding which bad news caused a decline. Non-bundled restatements are 5.94 times more likely to result in litigation. Bundled restatements have 8.17 times higher dismissal rates and 21.17 to 23.45 million lower settlement amounts.

We document significant reductions in corporate payouts-both dividends and (to a larger extent) share repurchases-during the 2008–2009 financial crisis. Payout reductions are more likely in firms with higher leverage, more valuable growth options, and lower cash balances, i.e., those more susceptible to the negative consequences of an external financing shock. Moreover, firms appear to use the proceeds from the reduction in payout to maintain cash levels and to fund investment. These findings are consistent with the view that a shock to the supply of credit (net of demand effects) during the financial crisis increased the marginal benefit of cash retention, leading some firms to turn to payout reductions as a substitute form of financing.

Quarterly earnings conference calls are becoming a more pervasive tool for corporate disclosure. However, the extent to which the market embeds information contained in the tone (i.e. sentiment) of conference call wording is unknown. Using computer aided content analysis, we examine the incremental informativeness of quarterly earnings conference calls and the corresponding market reaction. We find that conference call linguistic tone is a significant predictor of abnormal returns and trading volume. Furthermore, conference call tone dominates earnings surprises over the 60 trading days following the call. The question and answer portion of the call has incremental explanatory power for the post-earnings-announcement drift and this significance is primarily concentrated in firms that do not pay dividends, illustrating differences in investor behavior based on the level of cash flow uncertainty. Additionally, we find that a context specific linguistic dictionary is more powerful than a more widely used general dictionary (Harvard IV-4 Psychosocial).

This study examines whether trading patterns at the 52-week high reflect investor disagreement or behavioral convergence. Using StockTwits sentiment, TAQ microstructure data, and machine-learning-informed trading measures for S&P 500 stocks, we document that investor beliefs converge rather than diverge, thereby reducing disagreement by approximately 20%. Belief dispersion falls while both retail and institutional investors proportionally reduce trading and shift toward selling. Anchoring to the 52-week high generates a liquidity mirage, concentrated among the largest stocks where competitive market making prevails: effective spreads narrow and depth increases even as informed-trading intensity declines, consistent with adverse selection models but driven by behavioral convergence. Although liquidity appears to improve, price discovery weakens, and the stock subsequently underperforms characteristic and factor benchmarks by 20 to 30 basis points over five days. Our findings demonstrate how improvements in liquidity can coincide with weaker price discovery when investor beliefs converge around salient behavioral anchors.