Retail investors participate in 3,364 earnings calls during the period between 2008 and 2022, asking approximately 30% of the questions during those calls. Consistent with retail investors serving as a substitute for analysts, retail questions concentrate among stocks with limited analyst following, sharply increase following a plausibly exogeneous decline in analyst coverage and analyst call participation, and cluster at the end of the call. More importantly, retail investors ask questions whose sophistication and price impact are comparable to those of analysts. Retail investors ask more impactful questions when earnings call slide decks are available, earnings call disclosures are easier to read and retail investor-oriented research is more prevalent. We conclude that retail investors play a valuable role in facilitating the flow of information during earnings calls when sell-side analyst research is sparse.
| Speaker: | Dr Stanimir Markov Ashbel Smith Professor, Professor of Accounting, The University of Texas at Dallas |
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