What do they mean? Using media richness as an indicator for the information value of stock analyst opinion regarding post-earnings firm performance

Abstract

In this research the impact of media-richness on the investor reaction to earnings announcements is investigated. To this end, unstructured (high-richness) sources of analyst opinion are subjected to text-mining and combined with structured (low-richness) sources of analyst opinion, as well as other commonly used structured data relevant to company performance. Results indicate that equivocality is a major problem faced by investors, while uncertainty as understood by media-richness theory appears to be less dominant.