Faculty of Business Administration


  Hosted by The Business Research and Training Center


Do Short Sellers Use Textual Information? Evidence from Annual Reports

Hung Wan KOT

Assistant Professor in Finance

University of Macau


Date:               21 October 2020 (Wednesday)
Time:               15:00
Venue:             E22-4020


Registration:   https://umac.au1.qualtrics.com/jfe/form/SV_51EIVVTXXxTvLj7



We examine short sellers’ use of textual information in annual reports for shorting activities. We find that more uncertainty and negative words in annual reports are associated with greater abnormal shorting volume. Short selling motivated by textual information negatively predicts stock price reaction around the filing date of 10-K reports. We further provide some evidence that textual information used by short sellers are related to revisions of analysts’ earnings forecasts, changes in firm fundamentals, and increasing crash risk subsequently. Our results suggest that textual information in annual reports forms an important part of short sellers’ information advantage.



Dr. Hung Wan Kot is an Assistant Professor in Finance from Department of Finance and Business Economics. He obtained his PhD from Hong Kong University of Science and Technology. Before joining UM at 2017, he taught in Hong Kong Baptist University and University of Waikato, and visited City University of Hong Kong. His main research interest is empirical asset pricing, while he also expanded to corporate finance, hospitality and tourism finance in recent years. For more information, please visit his personal website at:  https://sites.google.com/site/hungwankot/