'503 Service Unavailable': When Acquiring Information Goes Wrong

Investors increasingly rely on digital infrastructure to acquire information and we study how a large, unexpected server outage of the SEC’s EDGAR system affects liquidity to characterize the resilience and capital market effect of information acquisition in the digital age. The SEC’s EDGAR system receives millions of requests per day for information on publicly listed firms and we find that liquidity worsens for firms more strongly affected by its outage. This effect is stronger when failed requests stem from funds and financial institutions, when they are algorithmic in nature, and when they target information not easily available elsewhere.