Research on the Effectiveness of Clarifying Rumors by Listed Companies in the Pharmaceutical Industry – Taking the Market Reaction of Ling Pharmaceutical as an Example

The stock market is the information market, and issuing clarification announcements is an important way for listed companies to respond to rumors and reports in the market media.This study will study the impact of the company’s clarification announcement on the short-term market response from the perspective of media rumors. Swedish media published a media rumor report on Yiling Pharmaceutical Company, Yiling Pharmaceutical Company immediately issued a relevant clarification announcement. This paper uses the event research method to study the stock price changes before and after the emergence of rumors and before and after the issuance of the clarification announcement by Yiling Pharmaceutical, so as to explore the effectiveness of the clarification announcement. This article collects the stock price data of Yiling Pharmaceutical between September 2019 and May 2020 and the 2020 quarterly report of Yiling Pharmaceutical, and analyzes the short-term market reaction of listed companies in the 7 trading days before and after and the long-term market reaction in 2020. The results show that the role of the clarification announcement on the market is not effective in the long term, and even in the short term, it may not bring about a large recovery in the stock price through the response to the event, but it can more play a role in alleviating the large change in the stock price in response to the rumored event and stabilizing the market.