The Impact Of Electronic Products’ Announcement And Release On Listed Company’s Stock Price

Launching a new product to market is vital to firms’ financial performance.Such impact of a new product launch will quickly be quantified on the stock market,reflected through the changes of firms’ stock price in the form of abnormal returns. Eventstudies are used to examine how stock prices respond to information released during apublic announcement of the event. The information retrieval on the Internet can representinvestors’ attention. The change of investors’ attention may cause changes of expectation,which may further affect the effectiveness in evaluating the financial returns of newproducts to firms. Google Search Volume Index (SVI) can be used to present investors’attention. Hence, we can use it to examine its impact on stock price and examine how thechange of stock price affects investors’ expectations for new products.This paper has mainly finished the following aspects of work: As to research methods, wemainly use descriptive statistics, pooled regression, panel regression and VAR regression.The empirical results are based on research methods we described in previous chapter.After that, we start the final part of empirical analysis: robustness test. Specificallyspeaking, we focus on introducing ASVI, grouped by company size, changing the eventwindow, PVAR and portfolio analysis for robustness tests. Finally, we draw some keyconclusions and set out our vision for the future.From the empirical study, we can draw some key conclusions:1) New productannouncement and released will cause investors’ attention, but reduce stock return.2)Besides, the negative effect of new product released causing investors’ attention toinfluence on stock return is smaller than new product announcement. Before theannouncement of new products, investors always hold a good expectation because ofmedia’s publicity, however, the disparity between expectation and reality will causeinvestors disappointed and hence reduce stock return. And waiting until the new productreleased, the disappointment has been reflected completely in the stock market, so the newproduct released will reduce the speed and strength of stock decrease, even possibly bringa callback.3) And then, before the announcement of new products, the channel of people access to information is limited, so the SVI on the day after announced day is more thanthat on the announced day, which reflects the lag effect of people obtaining information.And waiting until the new product released, people has mastered plenty of informationabout new products via Internet, so the lag effect disappears.4) Moreover, high stockreturn will naturally stimulate great investors’ interest in attracting their attention on itspresented company’s latest new products.5) In addition, we also found some interestingconclusions, such as the time effect, momentum and reversed effect, company size effect,and book to market ratio effect and multiple products company effect.