Stock Market Response To Changes In Movies Opening Dates

How does the market react to news regarding large uncertain projects? The authors analyze stock market reactions to information about changes in opening dates of movies, and present two main findings. First, they find systematic negative stock price response to the changes they consider, suggesting that any changes are interpreted as bad news by the market. Second, they find that the market reaction is greater for movies with higher production costs, but is unrelated to movies' subsequent box office revenues. This may point to a limited ability of the market to predict the box office performance of a movie.