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Communication of uncertainties about company’s future to capital markets

Communication of uncertainties about company’s future to capital markets

PI: Ekaterina Svetlova (University of Leicester)

Project Overview: The project concerns the communication of radical uncertainties in capital markets, a topic that has not been subject to systematic investigation to date. This exploratory qualitative study will address the recent concerns that have been raised about the quality and transparency of information communicated towards professional and amateur investors. All publicly traded companies report the most recent financial numbers to the markets and deliver guidance concerning their genuinely unknown future, i.e., expected growth, new products, forthcoming mergers etc. These model/number-based stories provide a base for investors’ decision-making. Our understanding of how such decision-relevant “convincing narratives” are created and communicated is still rudimentary; the project will contribute to opening this black box.

In particular, this research aims to investigate uncertainty visualisation and communication to capital markets by publicly traded companies through answering the following questions: Which language do companies use? How do they represent uncertainty – in graphs, pictures, numbers and texts? Do companies talk in probabilities, possibilities or possible states of the world (scenarios)? Do they provide point forecasts (e.g. the exact earnings per share numbers for each quarter), ranges of uncertainty, levels of confidence (in any form)? Which models and narratives do they use? Furthermore, the project will suggest first steps towards the “best practice” of communicating uncertainties to capital markets.

 

 

M2D Conference 2018

11 – 14th June 2018, Cambridge.

Call for Abstracts is now CLOSED

Registration is now CLOSED

M2D Funding Applications Deadline

Friday, 31st August 2018

(last chance to submit 3-month embedded research, early career research and workshop applications)

Next Expert Panel Meeting

Friday 14th September 2018

Get in contact

Emma Clarke m2d@exeter.ac.uk
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