[resters]

ultimately supply and demand should result in less demand for the stock of companies that do not provide adequate transparency about results.

Supporters of the idea would likely say: "But considering that stock price crashes result in government bailouts, why bother reporting bad news since it just panics everyone and necessitates a bailout that shouldn't have been necessary."

[smeggysmeg]

Rational market theory is dead. Markets are not rational and do not respond to situations in rational fashions like you suggest. People operate on hype, fear, and insider trading.

[resters]

I think the law changes the article describes prove your point. Companies would have nothing to gain by this if investors were rational.