Conference Presentations and the Disclosure Milieu

Conference presentations differ from other voluntary disclosures in that the audience for the disclosure is co‐located with managers in a well‐defined physical and social setting, or “disclosure milieu.” The milieu affects the degree to which conference participants can update their prior beliefs about the firm with information signals obtained through interactions with management and other informed participants. While the average abnormal stock return and volume reactions to presentations are positive, there is a great deal of cross‐sectional variation as indicated by negative median reactions. We find that conference characteristics that determine the nature of the audience and its interactions, such as sponsor, location, size, and industry‐focus, are significantly associated with the market reaction, consistent with the disclosure milieu explaining the cross‐sectional variation in the information content of the presentation. We also find that conference characteristics explain changes in subsequent analyst and institutional investor following, consistent with the disclosure milieu creating differences in access to management by potential new investors and analysts.