Management Science· 2026Q1
Bad News Bearers: The Negative Tilt of the Financial Press
- 0citations
- Q1SCImago
- 2026year
Short summary
Increased financial media coverage predicts lower firm fundamentals, earnings surprises, and higher bankruptcy risk, with articles often conveying negative sentiment that drives investor attention.
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Key points
- Increased media coverage predicts lower firm fundamentals and earnings surprises.
- Higher media coverage is associated with an increased likelihood of bankruptcy, dividend cuts, and delistings.
- Media articles often convey negative sentiment, attracting more investor attention.
- Media coverage initially impedes price discovery for negative news via an attention effect.
AI-generated from the title and abstract; the full text is not read.
Abstract
We show that increased media coverage strongly predicts lower subsequently announced firm fundamentals, earnings surprises, and higher likelihoods of bankruptcy, dividend cuts, and delistings. Additionally, we find that media articles often convey negative sentiment, with investor attention increasing around the publication of negative articles, suggesting that the media tilts coverage toward negative events to drive readership. We also show that media coverage initially impedes price discovery for negative news through an attention effect and that investors respond sluggishly to the negative signal embedded in media coverage decisions, leading to a gradual incorporation of the negative information into prices and return predictability. This paper was accepted by David Simchi-Levi, finance. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.00580 .
The authors' abstract, as published at the source. Management Science, 2026 · DOI ↗
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