Add to ORKGPortraying a digital business strategy seems to be what capital markets are looking for in firms. Tech companies raise staggering amounts of capital and long-established companies that announce a digital business strategy double their firm value over night. By drawing from information economics literature, this study investigates drivers and outcomes of a firm’s digital business strategy by utilizing the new construct of a firm-wide digital orientation. Applying a cross-industry longitudinal study, results indicate that initial public offerings provide financial flexibility to drive a firm’s digital orientation. Yet, against expectations, capital markets react negatively to firms depicting a digital orientation post share issuance. We expla...