Savvy PR pros have known for years that if you have bad news to announce, the best day to announce it is on Friday.
That’s because Saturday’s paper is skinny and has less space for stories. People are distracted by chores and other things on Saturday and don’t watch as much TV as they do during the week. In newsrooms everywhere, the weekday crew is handing off assignments to the weekend staff. And journalists are still working against the clock to publish the big Sunday paper.
But the Friday phenom may be changing. A story in the Money section of Friday’s Wall Street Journal says that even though Friday is still a good day to release bad news, the number of Friday announcements declined in 2002 to just one-sixth the number of Wednesday announcements, compared with one-third in 1996. Professor Stefano DellaVigna, a professor at the University of California Berkeley, and Joshua Pollet, an economist at the University of Illinois at Urbana-Champaign, studied the frequency of bad-news announcements and their effect on companies’ stock prices.
While it’s well-known on Wall Street that companies wishing to manage the stock-price reaction to bad news will choose to slip their announcements in on Fridays, when trading volumes are typically thinner, the economists’ findings also suggest investors can make money if they beat companies at their own timing game.
If you look up on Wednesday what companies are announcing on Friday, then you can short them, Professor DellaVigna explained. He was referring to companies that have scheduled release of their financial earnings on a Friday. That’s because there’s a 25 percent greater probability that they’re going to announce a negative earnings surprise.
You can read the entire study.
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