Managing the media coverage: evidence from managers' stock selling

This paper investigates whether the insiders strategically manage the disclosure and timing of media coverage to maximize their trading profits. Using a sample of Chinese A-listed firms during the period of 2008-2017, we find that when top managers intend to sell their shares, they would increase the media coverage in the early stage to pull up the stock price based on the self-interest motivation. That's to say, the media attention on the focused firms represents a significant increase during the selling period and decreases largely after the selling is completed. In addition, the association is mitigated in SOEs and firms belonging to more competitive industries. We also find that there are significant positive cumulative abnormal returns during the selling period while negative ones after the event. Our findings suggest that managers could intentionally manage the media during important corporate events for their own benefits at the cost of minority shareholders.