Abstract
There were bad news affected stock prices, i.e. Fraud and bad financial performance. Fraud on State Owned Enterprises (SOE) listed companies was suspected to have a stronger impact on stock prices compared to Non-SOE issuers. The effect of bad financial performance on Non-SOE issuers was thought to have a stronger impact on stock prices when compared to SOE issuers. This research was conducted on SOE and non-SOE that experienced fraud and bad financial performance from 2017 to 2019. Data analysis was performed with the Google Search Volume Index, Difference Test, and Multiple Linear Regression Analysis. The data from Google Search Volume Index showed that SOE issuers were more searched by the public when compared to Non-SOE issuers in responding to Fraud and bad financial performance. Linear Regression Analysis found that the decline in stock prices of SOE issuers was lower than the Non-SOE issuers in response to Fraud. The decline in stock prices of SOE issuers in response to the bad financial performance in the Property and Finance sectors was lower than the decline in stock prices of Non-SOE issuers. However, the decline in the stock prices of Non-SOE companies in response to the bad financial performance in the Basic Industry sector was lower than the SOE issuers. This could be influenced by SOE stock ownership dominated by the Indonesian government and the existence of a Conservatism Bias.
Highlights
Beers (2019) stated that there was some negative information that could negatively inluence stock prices of company
Descriptive analysis was done by seeing GSVI (Google Search Volume Index) on each State Owned Enterprises (SOE) company and Non-SOE which was detected Fraud and bad financial performance
Linear regression analysis for Fraud on WSKT and GIAA showed that there were no significant effect of Fraud
Summary
Beers (2019) stated that there was some negative information that could negatively inluence stock prices of company. One of those information were bad performance of financial sector, bad management of company, and disaster had by the company. Cuellar et al, (2009) asserted that information such as Fraud, selling assets, bad perception of consumers on company’s product and service could influence negatively stock prices. From those negative information, Fraud and bad financial performance were frequently occured in 2017 to 2019. The Financial Services Authority (OJK) report that there are 48 companies with bad performance of financial sector per 13 of August 2019
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