Incident Announcements vs. Hurricane Announcements

This chapter examines the differential impacts of general hurricane announcements and specific incident announcements on stock prices. By analyzing NYSE-listed firms, the study reveals that both types of announcements can significantly affect stock prices, often triggering negative reactions. The research highlights that even the anticipation of a hurricane, independent of direct impact, can influence investor behaviour. Furthermore, the study introduces a novel comparison between hurricane incident and general hurricane announcements, employing transfer functions to identify patterns of stock price reactions,predominantly observing transitory changes indicative of overreactions. These findings underscore the critical importance of timely and transparent communication in mitigating adverse stock market responses.