TY - JOUR
T1 - Internet downturn
T2 - Finding valuation factors in Spring 2000
AU - Keating, Elizabeth K.
AU - Lys, Thomas Z.
AU - Magee, Robert P.
N1 - Funding Information:
We thank PC Data Online for providing its web-traffic database and Zacks Investment Research for providing analyst earnings forecasts. We appreciate the research assistance of Patricia Ledesma, Yen Ming Lai and the SAS macros developed by Donald Cram. We acknowledge the helpful advice from the attendees of the 2001 JAE conference and seminar participants at the University of Illinois at Chicago and Kellogg School of Management at Northwestern University. In addition, we thank Amy Hutton, Jonathan Lewellan (the discussant and referee), Robert Lipe, Jeroen Suijs, Beverly Walther, Ross Watts (the editor) and Jerold Zimmerman for helpful suggestions. The financial support of Northwestern University's Accounting Research Center and Guthrie Center for Real Estate Research is gratefully acknowledged.
PY - 2003/1
Y1 - 2003/1
N2 - During Spring 2000, the Internet Stock Index declined 45%. Using a sample of internet firms, this paper investigates whether this decline was associated with new disclosures, such as earnings, analyst forecast revisions, and web-traffic measures, or to a "reassessment" by investors of pre-existing information. We find only modest evidence that the decline was associated with new disclosures. However, returns and post-decline stock prices are significantly explained by 1999 annual report data. When earnings are decomposed into gross profit and various expenses, traditional financial information contributes significantly more in explaining the cross-sectional returns and price levels than non-financial information.
AB - During Spring 2000, the Internet Stock Index declined 45%. Using a sample of internet firms, this paper investigates whether this decline was associated with new disclosures, such as earnings, analyst forecast revisions, and web-traffic measures, or to a "reassessment" by investors of pre-existing information. We find only modest evidence that the decline was associated with new disclosures. However, returns and post-decline stock prices are significantly explained by 1999 annual report data. When earnings are decomposed into gross profit and various expenses, traditional financial information contributes significantly more in explaining the cross-sectional returns and price levels than non-financial information.
KW - Cash flow
KW - Earnings
KW - Internet firm
KW - Stock option
KW - Valuation
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U2 - 10.1016/S0165-4101(02)00086-1
DO - 10.1016/S0165-4101(02)00086-1
M3 - Article
AN - SCOPUS:0037219528
VL - 34
SP - 189
EP - 236
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
SN - 0165-4101
IS - 1-3
ER -