"Cheap talk" can drive up share price

01/22/2009 | INSEAD Knowledge

When it comes to announcing results, it's not just what CEOs say but how they say it. A linguistic analysis of 20,000 corporate earnings announcements finds that "soft information" -- the executive's unverifiable assessment of how the company is doing -- can boost share price for the next two months. Language that conveys optimism and certainty works best.

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