Corporate Strategy, Earnings Manipulation, and Short Selling PDF Download
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Author: Xingbang Su
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Earnings manipulation has perplexed many investors and regulators for decades. Factors such as CEO's characteristics, macro environment, behavioral biases, and regulation rules are discussed in the literature. In this paper, corporate strategy aggressiveness is proposed to be one of the factors that leads to earnings manipulation. Short interest ratio is used to indicate how the market perceive and react to company's earnings manipulation probability. Based on the data from Russell 2000 constituents during 2015 to 2019, my hierarchical regression results indicate that firms with the aggressive strategy are more likely to be engaged in earnings manipulation activities, resulting in a higher short interest ratio. The findings are significant when the model uses a binary variable instead of a continuous variable to measure the corporate strategy aggressiveness in the robust test. This paper will interest investors that focus on fundamental investing and researchers who study accounting, corporate strategy, and financial market.
Author: Xingbang Su
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Earnings manipulation has perplexed many investors and regulators for decades. Factors such as CEO's characteristics, macro environment, behavioral biases, and regulation rules are discussed in the literature. In this paper, corporate strategy aggressiveness is proposed to be one of the factors that leads to earnings manipulation. Short interest ratio is used to indicate how the market perceive and react to company's earnings manipulation probability. Based on the data from Russell 2000 constituents during 2015 to 2019, my hierarchical regression results indicate that firms with the aggressive strategy are more likely to be engaged in earnings manipulation activities, resulting in a higher short interest ratio. The findings are significant when the model uses a binary variable instead of a continuous variable to measure the corporate strategy aggressiveness in the robust test. This paper will interest investors that focus on fundamental investing and researchers who study accounting, corporate strategy, and financial market.
Author: Andrew P.C.
Publisher:
ISBN: 9781521507728
Category :
Languages : en
Pages : 80
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Book Description
Are you worried how "clean" a company's earnings really are? Are you wondering if they are somehow "gaming" the numbers with financial shenanigans? Or maybe you're actively looking to short these bad companies. These days companies seem to think they can pull the wool over investors! They think clever accounting games and bogus excuses will mislead investors. Don't lose money investing in bad companies! I'll teach you how to spot the most popular accounting games and earnings manipulation strategies. You will learn how to spot deteriorating working capital (inventory, receivables, deferred revenue) trends that are highly predictive of stock price underperformance. With this book you will learn:*How to analyze insider selling to see if executives are bailing out*Aggressive non-GAAP reporting games*How companies use cookie jar accounts to smooth earnings*Mark-to-market accounting*Off balance-sheet accounts*How companies game earnings with funny expense accounting *Evaluating internal controls for potential errors and fraudWe'll even go through numerous case studies together so you can see how these tips apply in the real world. Don't get suckered into bad investments anymore!
Author: Frank J. Fabozzi
Publisher: John Wiley & Sons
ISBN: 0471704334
Category : Business & Economics
Languages : en
Pages : 434
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Book Description
The latest theoretical and empirical evidence on short selling in the United States and throughout the world To get the most success out of what the finance community regards as a risky business, short sellers need high-level information. The Theory and Practice of Short Selling offers managers and investors the information they need to maximize and enhance their short selling capabilities for bigger profits. Frank Fabozzi collects a group of market experts who share their knowledge on everything from the basics to the complex in the world of short sales, including mechanics of short selling, the empirical evidence on short-selling, the implications or restrictions on short selling for investment strategies, short-selling strategies pursued by institutional investors, and identifying short-selling candidates. Frank J. Fabozzi, PhD, CFA (New Hope, PA), is the Frederick Frank Adjunct Professor of Finance at Yale University's School of Management and Editor of the Journal of Portfolio Management. He is the author or editor of over 100 books on finance and investing.
Author: John Shon
Publisher: FT Press
ISBN: 0132615851
Category : Business & Economics
Languages : en
Pages : 225
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Book Description
Profit from earnings announcements, by taking targeted, short-term option positions explicitly timed to exploit them! Based on rigorous research and huge data sets, this book identifies the specific earnings-announcement trades most likely to yield profits, and teaches how to make these trades—in plain English, with real examples! Trading on Corporate Earnings News is the first practical, hands-on guide to profiting from earnings announcements. Writing for investors and traders at all experience levels, the authors show how to take targeted, short-term option positions that are explicitly timed to exploit the information in companies’ quarterly earnings announcements. They first present powerful findings of cutting-edge studies that have examined market reactions to quarterly earnings announcements, regularities of earnings surprises, and option trading around corporate events. Drawing on enormous data sets, they identify the types of earnings-announcement trades most likely to yield profits, based on the predictable impacts of variables such as firm size, visibility, past performance, analyst coverage, forecast dispersion, volatility, and the impact of restructurings and acquisitions. Next, they provide real examples of individual stocks–and, in some cases, conduct large sample tests–to guide investors in taking advantage of these documented regularities. Finally, they discuss crucial nuances and pitfalls that can powerfully impact performance.
Author: Zhang Yu
Publisher:
ISBN:
Category : Earnings management
Languages : en
Pages : 113
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Book Description
This study builds on two streams of literature that recently draw the attention of researchers: real earnings management (REM) and short selling. Graham et al (2005) reports that managers choose REM over accounting methods to manage earnings. The survey results suggest that REM is likely to be more prevalent than accrual-based earnings management, and should deserve more attention from academic research. Short selling has become a big concern to researchers due to the recent financial crisis and the combat against naked short sales. I empirically test how short sellers trade on firms' REM information, and whether short selling activity can serve as an external monitoring mechanism on REM. Since short selling activity and REM are jointly determined, I explore the research question on the interactions between REM and short selling activity via a simultaneous equation system. I further test whether the interactions between REM and short selling activity are affected by the recent short selling regulation change. The results show strong interactions between REM and short selling activity both before and after the recent SEC short selling regulation change. Short sellers use accounting information to trade. Particularly, they avoid shorting stocks with high levels of REM, which suggests that firms use costly REM to signal their good future performance. On the other hand, heavily shorted firms cannot afford to do REM, which supports the argument that short selling has an external disciplinary role over firms' REM behavior. The results hold if I use OLS or simultaneous equations. This study enriches the literature about how short sellers trade on firms' earnings management information and extends the disciplinary role of short selling over firms' REM behavior.
Author: Joseph A. Walker
Publisher: John Wiley & Sons
ISBN: 0471534641
Category : Business & Economics
Languages : en
Pages : 222
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Book Description
Combines a history of short selling with current strategies and applications to present a complete guide to this increasingly popular investment tool. Procedural and regulatory requirements are mixed with actual case studies and examples that readers can apply to specific situations. Risks and rewards of short selling are discussed in detail as are short selling as a tool for protecting other investments and for speculation.
Author: Marino Specogna
Publisher: iUniverse
ISBN: 0595264662
Category : Business & Economics
Languages : en
Pages : 120
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Book Description
Marino Specogna is a convicted stock market manipulator who exposes in a straight forward manner the deceptive techniques used by manipulators and traders to scam your hard earned dollars. The book goes into detail on the factors an individual investing in the stock market should be alerted to, to avoid being scammed. Included in the book are details on company share structure, tricks of manipulators and crooks on how to create share positions, facts never before disclosed in written form. After reading the book an individual will know how a scam deal is initiated, how the scam is furthered and how the manipulator manipulates a stock. The methods of a manipulator are exposed and can be detected by the reader in real time deals currently trading. This book may reveal methods that shock you and will leave you shaking your head in disbelief for a long time to come.
Author: United States. Securities and Exchange Commission
Publisher:
ISBN:
Category : Securities
Languages : en
Pages : 868
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Book Description
Author: Kristina M. Rennekamp
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Book Description
Prior literature finds that short selling is beneficial to the market because it increases liquidity and helps to discipline optimistic market prices. In this paper we use two controlled experiments to examine the potential for an unintended consequence of allowing short selling or easing short selling restrictions. Because prior research identifies short sellers as sophisticated market participants who have the ability to see through accrual earnings management choices, we predict and find that, when reporting is transparent, managers are more likely to use real earnings management (REM) relative to accrual earnings management (AEM) when short selling restrictions are relaxed. This is consistent with the idea that REM activities are more defensible as the result of legitimate operating decisions, and are therefore more likely to hold up to scrutiny from short sellers. Overall, our results suggest that regulations that are unrelated to financial reporting can affect how managers respond to the transparency that arises from financial reporting regulations.
Author: Bruce I. Jacobs
Publisher: John Wiley & Sons
ISBN: 0471714445
Category : Business & Economics
Languages : en
Pages : 304
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Book Description
An inside view of what makes market neutral strategies tick and how they can be implemented Market neutral strategies have gained attention for their potential to deliver positive returns regardless of the direction of underlying markets. As these strategies have built a record of good performance in recent years, their benefits have become apparent. Market Neutral Strategies draws on the wisdom and experience of professional practitioners to describe strategies that are being utilized by some of today's leading institutional investors. This book provides readers with an insider's view of what makes these strategies work and how they can be implemented successfully. Topics covered include long-short equity and convertibles, fixed income and merger arbitrage; the tax and ERISA implications of market neutral investing; and the failure of two notorious "market neutral" ventures, Askin Capital Management and Long-Term Capital Management. Bruce I. Jacobs (Florham Park, NJ) and Kenneth N. Levy are cofounders and principals of Jacobs Levy Equity Management, in Florham Park, New Jersey. They are coauthors of Equity Management: Quantitative Analysis for Stock Selection. Bruce Jacobs holds a PhD in finance from the Wharton School of the University of Pennsylvania. He is also the author of Capital Ideas and Market Realities: Option Replication, Investor Behavior, and Stock Market Crashes.
