This thesis examines the initial and long-term market reactions following reversed profit warnings on the Nordic markets. Furthermore, it investigates if firm size and trading volume can explain the magnitude of the market reaction. The study is based on 118 reversed profit warnings announced on the Nordic markets during 2010-2019 applying an event study approach, measuring abnormal returns. To examine if firm size and trading volume affects the market reaction, this study uses a regression analysis to complement the event study. Results show a significant initial market reaction, confirming that the market is genuinely surprised by a profit warning. In accordance with the efficient market hypothesis, the market is also seen to correct its expectations based on the new information. The initial reaction is more substantial for smaller firms and higher trading volume is seen to increase abnormal returns. Our long-term results show a significant reversal in share price, indicating that there is an overreaction to reversed profit warnings. The long-term regression results show that neither firm size nor trading volume explain the reversal in share price.