Andrea Menini

Earnings Management, Forecast Guidance and the Banking Crisis

This paper studies earnings management (EM) and forecast guidance (FG) activities of European banks between 2004 and 2008. Using 22,564 analyst forecasts for 55 banks, we find that the proportion of banks hitting or beating analyst consensus fell from 68.22% pre-crisis to 28.13% during the crisis. Banks enjoy higher cumulative adjusted returns (CARs) when they hit analyst consensus only in the crisis. EM is evident pre- but not during the crisis – it has no CAR effects. FG increases the probability of hitting benchmark earnings and during the crisis yields higher CARs. EM and FG act as complements in the crisis period.

Il ruolo dei competitor nell’orientamento delle politiche di comunicazione economico finanziaria

Il lavoro si propone di analizzare il ruolo svolto dai competitor sulle politiche comunicative delle imprese. In particolare, si concentra sulle principali forze competitive che influenzano la disclosure e sui processi imitativi ( herding ). Vengono considerati due particolari tipi di competitor : il leader in disclosure ed il leader in dimensione per verificare la presenza di processi di imitazione informativa e reputazionale. I principali risultati confermano le ipotesi di comportamenti imitativi intrasettoriali e evidenziano un trend di omogeneizzazione delle politiche di comunicazione.

Non-GAAP Earnings Disclosure and IPO Pricing

We investigate the disclosure and prominence of non-GAAP earnings metrics in IPO prospectuses and how these disclosures affect IPO valuation. In contrast to already-public firms, we find an inverted U-shaped relation between IPO firms’ GAAP performance and the likelihood that they will disclose a non-GAAP metric, suggesting differing motivations for non-GAAP disclosure in the IPO setting. Our valuation tests indicate that IPO firms disclosing non-GAAP earnings metrics generally exhibit higher offer values and less undervaluation during the IPO process and that the disclosure of adjusted earnings information in the prospectus enables them to minimize undervaluation by economically significant amounts. We find, however, that these valuation effects depend on how issuers calculate the non-GAAP figure. Specifically, our results indicate that IPOs are more undervalued when prospectuses contain non-GAAP metrics with larger recurring exclusions (which are less justifiable and generally viewed to be more aggressive). Additional analyses of post-IPO stock returns suggest that aggressive recurring exclusions are appropriately discounted during the IPO process.