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Jenny Zha Giedt Assistant Professor of
Accountancy George Washington University School of Business Washington, DC
Working Papers [8] Rim,
H. and J. Zha Giedt. (2022) "Announcements of Strategic Alternatives and Investor Mispricing." Link Link and description coming soon. [7] Zha Giedt, J. (2022) "Economic Consequences of Announcing Strategic Alternatives." Link Revising & resubmitting. Motivation: Little is known about the consequences of publicly revealing that a company is exploring strategic alternatives, yet managers and directors face this disruptive disclosure decision when their company seeks to sell itself in the M&A market. At first glance, the average announcement return of 6% suggests that this voluntary disclosure increases shareholder value. However, the eventual success or failure of the firm's attempt to sell itself allows me to identify the costs and benefits associated with disclosure: a valuation premium is only captured if a sale is consummated. Otherwise, if a firm announces that it's seeking strategic alternatives but ultimately fails to sell itself, the announcement premium gradually reverses and the long-run abnormal returns are negative! Further tests examine some potential mechanisms of how the announcement may affect firm value: the announcement leads to raised investor attention, a greater number of bidders in the sale process, worse operating performance, and more departing employees. [6] Zha Giedt, J. (2018) "Why Are Firms Sold? Disentangling Target Motives and Bidders' Selection of
Targets." Link
Published Papers [5] Nezlobin, A., R. G. Sloan, and J.
Zha Giedt. (2022) "Construct Validity in Accruals Quality Research." The Accounting Review. Link Motivation: This study provides a analytical and numerical assessment of the most commonly-used measures of accruals quality. An ideal empirical measure of AQ would not be associated with underlying economic parameters of a firm's earnings; moreover, it would also be monotonically increasing or decreasing in the presence of various types of accruals errors and have significant test power to detect lower AQ in the treatment versus control firms. While none of the 5 extant or 2 new measures we analyze provide a panacea, they vary in how close they come to achieving the ideal characteristics. Our results should be useful to researchers in choosing which combination of accrual quality proxies to use and in interpreting 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 Motivation: Measures of accruals and models of discretionary accruals are widely used in financial accounting research. Yet, empirical researchers are faced with many measures and models to choose from, where some of popular choices are incomplete and fragmented. To guide researchers, this paper provides a comprehensive definition and measure of accruals, and shows how some of the extant measures of accruals fit in as a component of "comprehensive accruals." For researchers interested in modeling non-discretionary accruals, this paper provides a more comprehensive model specification that takes into account the normal properties of accruals. Overall, we urge researchers to carefully consider which measure of accruals to use and how to model normal variation in accruals.
[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 Motivation: In the value-relevance literature, tests of the relation between an asset's value on the financial statements and the asset's market value are typically plagued by measurement issues, from imputing the asset's market value, and model misspecification issues, from imperfectly controlling for the company's other assets and liabilities. Oil and gas royalty trusts, however, provide a cleaner setting to conduct a value-relevance test because the primary assets of these trusts are mature oil and gas reserves, their other assets and liabilities are negligible, and the asset's estimated value is clearly disclosed in 10-Ks. We find that managerial DCF estimates of oil and gas reserves are priced by investors, yet investors may buoyantly overlook the finite nature of these reserves until media converage prompts the stock price to coverge with the DCF 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 Motivation: 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. Select empirical findings in this area are extended to the present period, including price and volume reactions to accounting information, the value-relevance of various earnings measures, and portfolio returns to accounting-based trading strategies. Other Articles [9] Zha Giedt, J. (2021) "Should A Company Reveal That It Is Evaluating 'Strategic Alternatives'?" Duke
University School of Law FinReg Blog. Link Motivation: Before publicly revealing that the company is evaluating strategic alternatives, the executive leadership should consider the potential benefits and drawbacks of the news affecting share prices, the M&A sales process, employees and customers. There is no correct 'one size fits all' approach, but the decision should weigh the individual company's circumstances. This article describes some key considerations. About Me Jenny is an Assistant Professor at the George Washington
University School of Business. Her research examines financial accounting quality and disclosure choices made by corporations
and their effects on the stock market and the market for corporate control. She currently teaches the financial accounting
core class in the undergraduate business curriculum and has previously taught a research seminar for doctoral students. Her research has been published in various academic journals including
The Accounting Review, Review of Accounting Studies, Abacus, and Annual Review of Financial Economics,
and practitioner outlets, such as Duke University School of Law's FinReg Blog. She is involved in academic and professional
service activities, including serving as a reviewer for journals and conferences, as a moderator for industry panel events
hosted by Bloomberg and the School of Business, and as a conference organizer for the accounting department's annual research
conference. Jenny 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 during her studies. Her 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. Her dissertation
is titled, "Voluntary Disclosure of Strategic Alternatives: A Cost-Benefit Analysis" (2016). Link Prior
to Berkeley, she worked as an auditor and forensic accountant at KPMG in Los Angeles, CA, and obtained her CPA license. She
also has prior experience in the mutual fund and hedge fund industries, with US Bank and Dorchester Capital, respectively.
She earned her Bachelor's degrees in Accounting and Business
Administration (Finance emphasis) and minored in Mathematics at the University of Southern California. In her spare time, Jenny enjoys ice skating, skiing, ballet, theatre and spending time with her family.
Email: zhagiedt@gwu.edu
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