Timeliness of investor reaction to corporate crypto-asset investment: Evidence from types of disclosures

Abstract

This paper investigates investor reactions to corporate disclosures of crypto assets. We find that investor reactions are negative and insignificant in the 3-day event window, while the reactions become positive afterward in the 5-day event window. This suggests V-shaped reverse reactions to the disclosures. We further investigate investor reactions to the different types and information quality of disclosures. The V-shaped reverse-reactions are statistically significant in 8-K, 10-Q, and 10-K filings. In addition, investors are likely to react to Form 8-K disclosures and disclosures with greater information quality. Our results have important implications for regulators and managerial practices regarding the disclosure of corporate investment decisions.