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Purpose This study investigates the influence of nonfinancial 8-K disclosures released during the earnings announcement window on the abnormal trading activities of individual investors. Design/methodology/approach We employ regression analysis in this empirical study to examine the impact of nonfinancial 8-K filings on individual investors' abnormal trading activities. Findings Our results reveal that individual investors exhibit higher levels of abnormal trading activities when firms release nonfinancial 8-Ks during the (0,1) window of earnings announcements. This effect is observed for both buyer-initiated and seller-initiated transactions and is particularly pronounced for firms reporting an operating loss. Negative sentiment in 8-Ks significantly intensifies such effect. Additionally, we find that buy-sell consensus increases significantly with concurrent nonfinancial 8-Ks. This suggests that 8-Ks may reduce information noise, leading individuals to trade with greater conviction. Originality/value Our study examines the joint influence of nonfinancial 8-Ks and earnings announcements on individual investors' trading activities, thereby providing a novel perspective on the mechanisms through which 8-K filings affect individual investors' trading behaviors.
Jiang et al. (Mon,) studied this question.
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