The Impact of New Product Announcements on Quick Service Restaurant Companies’ Stock Returns

This study seeks to answer two main questions: 1) Do product announcements impact quick service restaurant stock returns? 2) Do economic conditions impact the degree which product announcements impact quick service restaurant stock returns? 159 total product announcements were collected for 6 quick service companies: McDonald’s Corp., YUM! Brands Inc., The Wendy’s Co., AFC Enterprises Inc., Jack in the Box Inc., and Sonic Corp. 84 of these announcements were from 2005-2007 (Labeled “Pre-Recession”), and 75 were from 2009-2011 (Labeled “Post-Recession”). Using historical stock price data, an analysis of the overall trends of the mean-adjusted excess returns was conducted to determine whether or not product announcements impact the stock returns. Further analysis was conducted to determine whether the “Pre-Recession” results had different results from the “Post-Recession” results, demonstrating a difference between two different economic periods. The results showed that on average, the day following the product announcement had negative excess returns. In addition, there was a noticeable difference between “Pre-Recession” and “Post-Recession” post-announcement returns behavior. “Pre-Recession” results, on average, had positive excess returns in the 10 days following the product announcement, while “Post-Recession” results had negative excess returns in the 10 days following the product announcement

Masters of War: Rivals’ Product Innovation and New Advertising in Mature Product Markets.

We investigate the impact of rivals' product innovation and new advertising on a firm's financial market value in mature product markets. Our test bed is the carbonated soft drink market between 1999 and 2003, a period characterized by a near duopoly between Coca-Cola and Pespi. Empirically, we focus on new product announcements as a proxy of product innovation and on filed trademarks as a measure of new advertising. We find that rival product announcements decrease a firm's financial market value, and that rival filed trademarks increase it. Finally, we find that the effect of new advertising is channeled through market size dynamics, while that of product innovation operates through market share dynamics. Results are robust across different estimation techniques (event study, Tobin's q) and model specifications.Product innovation; Advertising; Firm value; Rivalry; Trademarks;

Advances in GPU architecture for deep learning and scientific computing

The talk will cover the recent NVIDIA product announcements made at the GTC'16 conference, and how the Pascal GPU and NVLink interconnect technologies greatly improve multi-GPU performance and efficiency in deep learning and scientific computing applications

New Product Announcements as Market Signals. A content analysis in the DRAM chip industry

New-product announcements (NPAs) have considerable effects on competitors in industrial markets. Several studies have shown that the perceived threat caused by an NPA may trigger severe competitive reactions. Yet it is still unclear how the perception of threat by competitors is related to the specific content of the announcement. In this study we explore the actual content of NPAs observed in a particular market. We do this through a multi-year content analysis of new-product announcements in the DRAM memory chip industry. We analyze patterns in the occurrence of attributes and demonstrate how firm strategy affects NPA content. Findings from this study provide important insights for managers about the design of NPAs. It also triggers further research on the use of NPAs in competitive industrial markets.competition;innovation;market signals;new product announcement;semiconductors

Media Endorsements and Stock Returns: Evidence from the Announcement of New Products

Unlike previous studies that have focused on the valuation effects of corporate announcements, this thesis which is rooted in the interface between marketing and behavioral finance, examines whether investors’ decisions are influenced by the word content of newspaper reports for new product announcements. By applying a textual analysis, the findings of this research project demonstrate that announcements of new products which financial newspapers cover using positive word content earn significantly higher abnormal returns than firms’ whose new-product announcements were covered without using positive word content by the financial press. The results of this study indicate that the significantly inflated abnormal returns are, on average, 270 basis points higher than the returns for new-product announcements that do not contain positive word coverage from financial newspapers. The evidence also reveals that only positive textual coverage exerts a significant impact on the market’s reaction. In addition, this study documents that announcing firms realize significantly higher abnormal returns than their industry rival firms which do not actively introduce new products into the market place. However, the stock price of rival firms is not adversely affected by the new product announcements of announcing firms. Furthermore, the results of this project illustrate the same but more pronounced pattern of abnormal gains for the technology-based industries. On the other hand, dramatic differences for the non-technology related industries could not be found. Additionally, the results of this research project document that there is an abnormally high Google Search Volume Index (SVI) for firms following positive announcements, suggesting that news with positive word content attract stronger investor attention. Moreover, this evidence suggests that the interaction between investor attention, measured by the SVI, and new- product announcements reveal that there is an inter-play between demand for new information (i.e., SVI) and supply of new information (i.e., new-product announcements), which shapes the market’s ultimate reaction to news. Overall, the results suggest that the market reacts to the linguistic content of the new-product announcement rather than to the announcement itself. This research contributes to the literature in several ways. First, this is the first study to examine the relation between shareholder value and textual content of new-product announcements. Second, unlike previous studies which ignore the textual and tone content of new-product announcements, the evidence of this thesis, reveals that not every new-product announcement leads to significant gains for stockholders of the announcing firm. Only new-product announcements with positive word content are associated with positive abnormal gains for the announcing firms. Third, gains to the new-product announcing firms significantly exceed those of rival firms. Fourth, this study provides evidence outside of the U.S. market and, hence, avoids the standard criticism that observed empirical regularities arise from data mining. Finally, from a practical perspective, the interesting implication of the empirical analysis of this thesis is that the textual design of new-product announcements plays a critical role in terms of how it affects investors, and, hence, the way they react to such announcements

First Announcements and Real Economic Activity

The recent literature suggests that first announcements of real output growth in the US have predictive power for the future course of the economy. We show that this need not point to a behavioural relationship, whereby agents respond to the announcement, but may instead simply be a by-product of the data revision process. Initial estimates are subsequently subject to a number of rounds of revisions: the nature of these revisions is shown to be key in determining any apparent relationship between first announcements and the future course of the economy.Announcements ; real activity ; data measurement ; revisions

Do New Product Announcements Have an Impact on Stock Prices of Consumer Electronic Firms?

This paper examines the stock price impact of new product announcements on the consumer electronic market by conducting event studies. Cumulative average abnormal returns are estimated for event windows of different lengths centered on the new product announcements. Cumulative abnormal idiosyncratic risk is estimated for the same event windows with the intention to research if new product announcements are associated with increased risk. Three out of five event windows are found to have positive cumulative average abnormal returns and all five event windows are found to have an increase in idiosyncratic risk on average. Different trading strategies are presented that can be adopted to exploit the empirical results

Strategic Product Pre-announcements in Markets with Network Effects

It is a widely adopted practice for firms to announce new products well in advance of actual market availability. The incentives for pre-announcements are stronger in markets with network effects because they can be used to induce the delay of consumers' purchases and forestall the build-up of rival products' installed bases. However, such announcements often are not fulfilled, raising antitrust concerns. We analyze the effects of product pre-announcements in the presence of network effects when firms are allowed to strategically make false announcements. We also discuss their implications for consumer welfare and anti-trust policy

The Changing Relationship Between Job Loss Announcements and Stock Prices: 1970-1999

We study the reaction of stock prices to announcements of reductions in force (RIFs) using a sample of 4273 such announcements in 1160 large firms during the 1970-99 period collected from the Wall Street Journal. We note that the total number of actual announcements for the firms in our sample follows the business cycle quite closely. We then examine changes over time in standard summary statistics (means, medians, fraction positive) of the distribution of stock market reactions, measured by the cumulative excess returns (CER) of firms’ stock prices over a 3-day event window centered on the announcement date, as well as changes over time in kernel density estimates of this distribution. We find clear evidence that the distribution of stock market reactions shifted to the right (became less negative) over time. One possible explanation for this change is that, over the last three decades, RIFs designed to improve efficiency have become more common relative to RIFs designed to cope with reductions in product demand. We estimate multivariate regression models of the CER controlling for the stated reason for the announceed layoff, industry, and other characteristics of the announced layoff. We find that almost none of the decline in the negative average stock price reaction between the 1970s and 1990s can be explained by these factors