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research-article

Riding the Blockchain Mania: : Public Firms’ Speculative 8-K Disclosures

Authors:

Stephanie F. Cheng,

Pengkai LinAuthors Info & Claims

Management Science, Volume 65, Issue 12

Pages 5901 - 5913

https://doi.org/10.1287/mnsc.2019.3357

Published: 01 December 2019 Publication History

Abstract

This paper provides evidence on public firms’ initial 8-K disclosures that mention Blockchain and investors’ response to these disclosures. We categorize the description of Blockchain activities in firms’ 8-Ks as Speculative (e.g., a vague future plan that involves Blockchain) or Existing (e.g., a description of Blockchain product). We document a sharp increase in the number of initial 8-K disclosures of Blockchain, particularly by Speculative firms, coinciding with the rise of Bitcoin prices and excitement in Blockchain technology in the last quarter of 2017. Investors react positively to the Blockchain 8-Ks issued by Speculative firms in the initial seven-day event window although the reaction is mostly reversed over the 30 days following the disclosure. The reaction is stronger when Bitcoin returns are more positive. Overall, our results are consistent with a situation that troubles the SEC and the financial press: investors overreact to a firm’s first 8-K disclosure of a potential foray into Blockchain technology and that overreaction is a function of the Bitcoin price bubble.

This paper was accepted by Brian Bushee, accounting.

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Cited By

Dyer TRoulstone DVan Buskirk A(2024)Disclosure Similarity and Future Stock Return ComovementManagement Science10.1287/mnsc.2023.491570:7(4762-4780)Online publication date: 1-Jul-2024
https://dl.acm.org/doi/10.1287/mnsc.2023.4915
Chen XCheng QLuo T(2024)The Economic Value of Blockchain ApplicationsManagement Science10.1287/mnsc.2023.467170:1(439-463)Online publication date: 1-Jan-2024
https://dl.acm.org/doi/10.1287/mnsc.2023.4671
Sun YZhu XWu WYang K(2023)Blockchain Technology and Corporate Default RiskJournal of Global Information Management10.4018/JGIM.33108831:7(1-19)Online publication date: 6-Sep-2023
https://dl.acm.org/doi/10.4018/JGIM.331088
Show More Cited By

Index Terms

Riding the Blockchain Mania: Public Firms’ Speculative 8-K Disclosures
1. Applied computing
  1. Law, social and behavioral sciences
2. Social and professional topics
  1. Computing / technology policy

Index terms have been assigned to the content through auto-classification.

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Information & Contributors

Information

Published In

cover image Management Science

Management Science Volume 65, Issue 12

December 2019

508 pages

ISSN:0025-1909

DOI:10.1287/mnsc.2019.65.issue-12

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Copyright © 2019, INFORMS.

Publisher

INFORMS

Linthicum, MD, United States

Publication History

Published: 01 December 2019

Accepted: 29 March 2019

Received: 15 February 2019

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Cited By

Dyer TRoulstone DVan Buskirk A(2024)Disclosure Similarity and Future Stock Return ComovementManagement Science10.1287/mnsc.2023.491570:7(4762-4780)Online publication date: 1-Jul-2024
https://dl.acm.org/doi/10.1287/mnsc.2023.4915
Chen XCheng QLuo T(2024)The Economic Value of Blockchain ApplicationsManagement Science10.1287/mnsc.2023.467170:1(439-463)Online publication date: 1-Jan-2024
https://dl.acm.org/doi/10.1287/mnsc.2023.4671
Sun YZhu XWu WYang K(2023)Blockchain Technology and Corporate Default RiskJournal of Global Information Management10.4018/JGIM.33108831:7(1-19)Online publication date: 6-Sep-2023
https://dl.acm.org/doi/10.4018/JGIM.331088
Hougaard JMoreno-Ternero JØsterdal L(2022)Optimal Management of Evolving HierarchiesManagement Science10.1287/mnsc.2021.418568:8(6024-6038)Online publication date: 1-Aug-2022
https://dl.acm.org/doi/10.1287/mnsc.2021.4185
Liu SBao L(2022)Research on the Response to Blockchain Investment Announcements Based on Event studyProceedings of the 7th International Conference on Intelligent Information Processing10.1145/3570236.3570261(1-5)Online publication date: 29-Sep-2022
https://dl.acm.org/doi/10.1145/3570236.3570261

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