"Do Marketing Questions Matter? Inquiries in Conference Calls and Intra-Day Stock Performance"

Over the past decade, firms’ conference calls with analysts have become an important and common form of information disclosure. Typically, a conference call consists of a presentation by the management team, followed by a Q&A section, where analysts are allowed to pose open questions to the management. The Q&A section of conference calls is considered important because it provides analysts to question managers on non-quantifiable aspects of the firm’s actions and performance. In this paper, we propose that analysts’ marketing questions in conference calls will be value relevant, affecting the firm’s intra-day stock performance. We propose that marketing questions posed by analysts about the firm’s future actions and performance will increase return volatility and trading volume in the 75 minute period surrounding the conference call. We use data from 456 quarterly conference call transcripts of 28 firms in the retailing and restaurant chain industry, between 2001 and 2007, as the empirical context for the research. The findings indicate that the marketing questions from analysts pertaining to the firm’s future performance are informative, increasing both return volatility and trading volume, while questions pertaining to the firm’s future actions are not.  This paper provides insight on two complementary mechanisms by which marketing information is value relevant-- information search by analysts rather than information released by the firm’s managers, and within minutes of its release, rather than over days, months or years. The findings also have implications for managerial practice, which we discuss.