Jenny Zha Giedt

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Research Interests

Companies' strategic reviews; the preliminary mergers and acquisitions process
The implications of financial reporting (e.g., earnings quality and management disclosures) on capital markets

Working Papers

[9] Zha Giedt, J. (2025) "Companies' Strategic Reviews: Determinants and Outcomes" Slides (for buy-side investment professionals; the presentation blends selected results from two papers) | Link

A company's review of strategic alternatives is a market-moving event (9% daily absolute stock returns, 8-fold increase in trading volume, and 12-fold increase in short sale volume), is associated with specific corporate governance traits, and leads to drastic, high-level changes such as the sale of the enterprise; a divestiture of certain assets; CEO, CFO, or Chairperson turnover; dividend termination; and bankruptcy or delisting. [Revise & Resubmit, Management Science]

[8] Rim, H. J. and J. Zha Giedt. (2025) "Mistaking Bad News for Good News: Investor Optimism and Mispricing of Strategic Alternatives Announcements" Slides (for buy-side investors) | Link

Investors tend to interpret companies’ strategic alternatives announcements positively (+5% 3-day stock returns), but the companies' stock returns are -10% in the following 6 months. We conclude that investors are overly-optimistic because they fixate on the future M&A potential of the announcing firms and do not fully impound the negative signal of these firms' declining future fundamentals. [Accepted, Review of Accounting Studies]

[7] Zha Giedt, J. (2024) "Why Are Firms Sold? Target Motives and Bidders' Selection of Targets in M&A" Link

Why do certain firms become takeover targets? I describe an M&A process whereby (1) firms first self-select to become potential target firms and then (2) bidders choose their targets from the sample of self-proclaimed, available targets. I find that low performing firms volitionally seek their own sale or merger whereas bidders appear to select target firms with relatively better performance and efficiency.

Published Papers

[6] Zha Giedt, J. (2023) "Economic Consequences of Announcing Strategic Alternatives: A Voluntary Disclosure's Benefits and Costs" Contemporary Accounting Research. Link

When a company seeks to sell itself in the M&A market, managers and directors must decide whether to announce the review of strategic alternatives, weighing the costs and benefits of public disclosure. The benefits are that disclosure leads to greater investor attention and a more robust M&A sales process, and ultimately, a valuation premium if a transaction is consummated. The costs are that a public process consumes more resources and that the public news alienates stakeholders such as customers and employees, leading to worse operating performance and lower employee growth.

[5] Nezlobin, A., R. G. Sloan, and J. Zha Giedt. (2022) "Construct Validity in Accruals Quality Research" The Accounting Review. Link

We conduct an analytical and numerical assessment of five extant measures and two new measures of accruals quality (AQ). An ideal empirical measure of AQ would not be associated with underlying economic parameters of a firm's earnings; moreover, its value would be monotonically increasing or decreasing in the presence of accruals errors so that researchers can detect when low AQ exists. We provide guidance to researchers in choosing which combination of AQ proxies to use and in interpreting extant research findings.

[4] Larson, C. R., R. Sloan, and J. Zha Giedt. (2018) "Defining, Measuring and Modeling Accruals: A Guide for Researchers" Review of Accounting Studies. Link

Measures of accruals and models of discretionary accruals are paramount to financial accounting research. To help researchers reconcile the many measures and models of accruals in the extant literature, we provide a comprehensive definition and measure of accruals and a comprehensive regression model of the properties of accruals. We urge researchers to carefully consider, depending on the research question, which measure of accruals to use and how to model normal variation in accruals.

[3] Zha Giedt, J. (2018) "Modelling Receivables and Deferred Revenues to Detect Revenue Management" Abacus. Link

Researchers and regulators interested in detecting earnings management can estimate a company's abnormal revenues. Company managers may use accounts receivable (i.e., positive residual from the first regression below) and deferred revenues (i.e., negative residual from the second regression below) strategically to accelerate revenue recognition. First, a normal accounts receivable accrual is explained by contemporaneous revenue and future cash collections from customers. Second, a normal deferred revenue accrual is explained by contemporaneous cash collected from customers and future recognized revenue.
ΔAccounts receivable_t = α₀ + α₁*1/Avg assets_t + α₂*ΔRevenueQ123_t + α₃*ΔRevenueQ4_t + α₄*ΔCash flow from sales_t+1 + e_t
ΔDeferred revenue_t = α₀ + α₁*1/Avg assets_t + α₂*ΔCash flow from sales_t + α₃*ΔRevenue_t+1 + e_t

[2] Patatoukas, P. N., R. G. Sloan, and J. Zha. (2015) "On the Pricing of Mandatory DCF Disclosures: Evidence from Oil and Gas Royalty Trusts" The Accounting Review. Link

Oil and gas royalty trusts provide a relatively clean setting for conducting a "value-relevance" test, which tests whether an asset's financial statement value is significantly related to its market value. Managers clearly disclose oil and gas reserves' estimated value in 10-Ks, and investors price (but overprice) the managers' estimates. Overpricing occurs because investors overlook the finite nature of the oil and gas reserves until media coverage prompts the stock price to coverge with the DCF valuation estimate.

[1] Dechow, P. M., R. G. Sloan, and J. Zha. (2014) "Stock Prices and Earnings: A History of Research" Annual Review of Financial Economics. Link | PDF

The financial accounting and capital markets literature is storied and vast. This paper summarizes the main properties of earnings and its components, and how they are useful to investors and relate to stock prices. We extend select empirical findings to the present, showing price and volume reactions to accounting information, the value-relevance of various earnings measures, and portfolio returns to accounting-based trading strategies.

Other Articles

[12] Zha Giedt, J. (2024) "Should Companies Announce Reviews of Strategic Alternatives?" Columbia Law School Blue Sky Blog. Link

Whether to make the news public is a key decision that can have significant consequences affecting investor reactions, the subsequent sale process (should one occur), firm operations, employees, and ultimately firm value.

[11] Zha Giedt, J. and H. J. Rim. (2023) "Does the Market Misprice Companies’ Strategic Alternatives Announcements?" Columbia Law School Blue Sky Blog. Link

The news that a company is evaluating strategic alternatives seems to trigger an irrational response marked by inefficient stock price movement. We propose that a cognitive bias known as the “availability heuristic" explains why investors are systematically overly optimistic upon seeing these types of corporate announcements.

[10] Zha Giedt, J. (2021) "Should A Company Reveal That It Is Evaluating Strategic Alternatives?" Duke University School of Law FinReg Blog. Link

Before publicly revealing that the company is evaluating strategic alternatives, the corporate leaders should consider the potential benefits and drawbacks of the news affecting share prices, the M&A sales process, employees and customers. While there is no universal approach, the decision should weigh the individual company's circumstances. This article describes some key considerations.

Data

Strategic reviews by publicly traded U.S. companies, 1990 through mid-2018, N=1,215 Link
- Data from Zha Giedt (2023)
- Updated sample period coming soon

About Me

I am an assistant professor at the George Washington University School of Business. My research examines corporate financial accounting quality and disclosure choices and their effects on the stock market and the market for corporate control. My research appears in journals including The Accounting Review, Review of Accounting Studies, Contemporary Accounting Research, Abacus, and Annual Review of Financial Economics and featured on corporate law websites such as Columbia Law School's Blue Sky Blog, Duke University School of Law's FinReg Blog, Deal Laywers Blog, and Harvard Law School's Forum on Corporate Governance. At GWU, I teach the financial accounting core class for undergraduates and previously taught a research seminar for doctoral students. I am involved in academic and professional service activities, such as serving as a reviewer for numerous journals and conferences, as a moderator for industry panel events hosted by Bloomberg and the School of Business, and as a committee member for the School of Business' annual accounting research conference and the American Accounting Association.

I graduated with a PhD in Business Administration with an Accounting emphasis from the Haas School of Business at UC Berkeley in 2016 and was a Deloitte Foundation Doctoral Fellow. My UC Berkeley dissertation explores why certain companies voluntarily announce that they are seeking strategic alternatives and documents the costs and benefits associated with the announcement: "Voluntary Disclosure of Strategic Alternatives: A Cost-Benefit Analysis" (2016) Link. One of my continued research interests is understanding the corporate decision to evaluate strategic alternatives, which occurs when a firm calls into question its current standalone strategy and seeks a potential sale or merger to maximize shareholder value.

Prior to Berkeley, I worked as an auditor and forensic accountant at KPMG in Los Angeles, CA, and obtained my CPA license. I also worked in the mutual fund and hedge fund industries, with US Bank and Dorchester Capital. I graduated with my Bachelor's degrees in Accounting and Business Administration (Finance emphasis) and minored in Mathematics at the University of Southern California.

In my spare time, I enjoy figure skating, skiing, classical ballet, and spending time with my young family.