On October 22, 2015, shoe company Skechers (ticker SKX) reported quarterly earnings. In the one month leading up to its report, SKX went from $47.14 to $46.19, down 2%. During the same one-month period of time the S&P500 was up approximately 6%. On October 23, the trading day immediately following Skechers earnings report, the stock was down almost 32% (!!). On October 23, 2015 the S&P500 was up approximately 1%.

Submit a solution discussing:

R1. Does the price performance of Skechers provide any evidence for one of the three forms of market efficiency listed by Fama. If so, why? If not, why not?

R2. Search the internet to understand Regulation FD. Does Reg FD have any bearing on post earnings price moves such as the one exhibited by Skechers in our example? If so, why? If not, why not.

R3. If Skechers stock was listed on the Nairobi stock exchange, an emerging market without the same disclosure regulations as the United States, would the stock price reaction around earnings likely be the same as observed in our example, or different? If the same, why? If different, why?