Purpose: This paper aims to enrich the scope of the influence of media reports on the stock risk, and it also provides a path to support the research on the relationship between media reports and idiosyncratic risks in the stock market.Design/methodology/approach: The authors select financial restatement samples of listed companies in China from Jan 2015 to Dec 2017 to explore the impact of the financial restatement on the idiosyncratic risk of stocks. Further, the financial restatement that has more media attention may play a more significant role in promoting the idiosyncratic risk.Findings: The authors found that the financial restatement of listed companies has a significant positive effect on the idiosyncratic risk of stocks. Specifically, the idiosyncratic risk changed five months before the restatement. After the restatement, the idiosyncratic risk increased by 83.47 in five days then decreased slowly, which lasted about one year. The restatement caused by sensitive issues and legal issues has a greater impact on the idiosyncratic risk. Both current restatement and delayed restatements will increase the idiosyncratic risk of stocks, but the impact of the latter is higher than the former.Research limitations/implications: Possible deficiencies in the paper are that the number of restatements caused by major accounting errors is low. Therefore, no regular conclusions were drawn on the impact of the financial restatement caused by major accounting errors.Practical implications: The conclusions provide a basis for targeted supervisory measures on the restatements of listed companies. The increase in financial restatements is closely related to the lack of governance mechanisms in the stock market. For investors, although the mystery of idiosyncratic volatility exists significantly in the market, the company's valuation level will affect the relationship between the idiosyncratic risk and expected return. Investors should pay attention to the intrinsic value of the company and should not blindly pursue stocks with a low idiosyncratic risk.Originality/value: These conclusions may enrich the scope of the influence of media reports on the stock risk and also provide a path to support the research on the relationship between media reports and idiosyncratic risks in the capital market.

We built a Bi-Directional long-term and short-term memory (Bi-LSTM) model to identify and classify the Chinese posting text of stocks on the Eastmoney website in China and constructed the daily index of Chinese investors’ sentiment. Furthermore, based on the GSADF method, we examine the stock price bubbles and study the impact of investor sentiment and stock price bubbles. We found investor sentiment has a positive effect on the existence of stock bubbles, as well as their intensity. This effect is more significant in small-scale, high-equity concentration, and non-state-owned enterprises. Investor sentiment has an impact on stock price bubbles through volatility, and stock price bubbles are often accompanied by higher premium risk. The conclusion is helpful to understand the mechanism of investor sentiment on stock bubbles from a micro perspective, and it also can be a reference in identifying stock bubbles from the viewpoint of investor sentiment.