Reputation Consequences of Strategic Metric Opacity Evidence from Customer KPI Discontinuations and Capital Market Reactions

Abstract

Public firms increasingly disclose customer, platform, safety, service, and community metrics that help stakeholders evaluate the condition of intangible market assets. These measures are not always mandatory, and firms can later redefine, aggregate, rename, or discontinue them. This paper examines whether sudden opacity in voluntarily disclosed stakeholder metrics functions as a negative corporate signal. The empirical sample contains 1,904 metric-opacity events among 486 U.S.-listed firms from 2012 to 2024. Events include discontinued customer counts, reduced churn disclosure, aggregated user metrics, removed service-quality indicators, suppressed complaint measures, discontinued safety statistics, and altered community-impact indicators. The data combine quarterly filings, earnings-call transcripts, investor presentations, analyst questions, option prices, equity returns, product-review sentiment, customer-search behavior, employee text, and institutional trading. A transformer-based disclosure model identifies expected metric continuation and flags unexpected opacity when a historically recurring stakeholder metric disappears or becomes less diagnostic. The results show that unexpected metric opacity is associated with a three-day abnormal return of minus 0.58%, a 2.74% rise in thirty-day implied volatility, and a 17.9% increase in analyst questions about operating quality. The penalty is largest when omitted metrics previously tracked customer retention, complaint rates, service reliability, or user engagement. Firms with strong pre-event reputation and stable metric histories experience sharper reactions, consistent with expectation violation. Machine-learning estimates show that disclosure history, metric diagnosticity, and stakeholder sentiment deterioration predict market penalties more accurately than firm size or earnings surprise. The evidence indicates that withholding previously informative stakeholder metrics can damage reputation by increasing uncertainty about customer relationships and managerial credibility.