Abstract

COVID 19 has been determined as a pandemic disaster by WHO in which resulted in volatile stock markets. Investor predicts that the pandemic can be a threat to the company's cash flow whereas manager use the last year financial condition to defend their stock price. We evaluate whether the company's operating cash flow moderates the company's financial condition and stock price reactions, and also makes a comparison between before and during the Covid-19 pandemic using DiD. The regression analysis model used is random effect model. The object of this research is the hotel, tourism, restaurant, and retail trade sub-sector companies in the first quarter and second quarter of 2020, annually 2019 and 2018. We find that the company's financial condition that affects the stock's price reaction is only ROA. We also find that operating cash flow strengthens the relationship between the all financial condition of the company and the stock price. Besides, we prove that the Covid-19 pandemic caused a significant stock price reaction between the time before the pandemic compared to the time during Covid-19 disaster in Indonesia.

Keywords: Covid-19, stock price, finansial condition, operating cash flow