Earnings Announcements

Good News for Institutional Investors and Short Sellers

Henk Berkman, Michael D. Mckenzie*

*Corresponding author for this work

Research output: Contribution to journalArticle

20 Citations (Scopus)


In this paper, we consider the trading behavior of institutional investors and short sellers around earnings announcements. The results suggest that institutional investors, and to a lesser extent short sellers, successfully anticipate earnings news. In the period immediately after the earnings announcement, both types of traders are active in the market and trade in response to the earnings announcement. In particular, short sellers are quick to increase their short positions when a company releases bad news. Institutional traders also trade in response to the news; however, they take longer to react.

Original languageEnglish
Pages (from-to)91-113
Number of pages23
JournalFinancial Review
Issue number1
Publication statusPublished - Feb 2012


  • Earnings announcements
  • Informed traders
  • Institutional ownership
  • Post-earnings announcement drift
  • Short selling

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