| Firms release disclosures to investors frequently at the time of the earnings announcement ("bundling"), then provide relatively few disclosures during the course of the quarter. I investigate the motives for, and economic consequences of, bundling. First, I compare announcement and post-announcement returns to bundled and non-bundled disclosures and find bundling increases immediate market reactions and reduces drift. I interpret the smaller under-reaction to bundled disclosures as evidence of improved processing. However, I caution that I study only disclosures which complement the earnings announcement, so the results may not generalize to disclosures with a different relation with earnings. Second, I examine whether managers bundle to improve processing. I find firms bundle more significant disclosures and more complementary disclosures more frequently, consistent with firms supplying disclosures with the earnings announcement when doing so improves investor processing. My results have implications for our understanding of the economic consequences of parceling out information in different contexts. |
