<p>The disclosure of soft, forward-looking information plays a crucial role in shaping investor decisions and firm price. Such information often relies on managerial expectations and private knowledge, giving managers incentives to present it strategically—most notably by biasing the tone of their communication. Investors, however, may learn about this bias over time and adjust their valuation of future managerial reports accordingly. We analyze the strategic use of tone in mandatory disclosures within a multi-period setting where investors adaptively update their beliefs. Our findings show that a manager’s optimal tone choice is shaped by the underlying soft information, the market’s response to past tone choices, managerial compensation, and the strength of internal controls. When incentives are strong and internal controls are weak, managers may choose an excessively biased tone in the disclosure of soft information.</p>