Insider Trading and the Post-Earnings Announcement Drift

Download or read book Insider Trading and the Post-Earnings Announcement Drift written by Christina Dargenidou and published by . This book was released on 2017 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that trades by corporate insiders after an earnings announcement determine in part the extent of the post-earnings announcement drift anomaly. Contrarian trades mitigate the under-reaction to earnings announcements, and confirmatory trades allow for price discovery with price movements continuing in the same direction of the earnings surprise. These results are consistent with insider trading being a mechanism that provides relevant information on transitory or permanent changes to the earnings process allowing the market to make appropriate inferences about the nature of the earnings surprise.