Analyst Tipping: Additional Evidence |
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| Authors: | Stanimir Markov Volkan Muslu Musa Subasi |
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| Affiliation: | 1. Stanimir Markov is from the Cox School of Business, Southern Methodist University, Dallas, TX;2. Volkan Muslu is from the C.T. Bauer College of Business, University of Houston, TX;3. and Musa Subasi is from the Robert H. Smith School of Business, University of Maryland, College Park, MD. The authors thank Suresh Radhakrishnan, Michael Rebello and seminar participants at the University of Texas at Dallas and the 2012 AAA Annual Meeting. |
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| Abstract: | We examine whether analysts tip investors during investor conferences. We find that conference‐day abnormal returns of a presenting company are about 0.6% higher when the conference is hosted by an analyst who will initiate coverage with a Buy recommendation than when the conference is hosted by non‐initiating analysts. Furthermore, conference‐day abnormal returns of the presenting company amount to half of the price run‐up during the 20 trading days prior to the Buy initiation. Finally, there is a statistically and economically significant price run‐up prior to a Sell initiation (by about –0.7%) when the analyst who will initiate coverage with a Sell recommendation hosts a conference but does not invite the company to present. Our findings collectively suggest that analysts, rather than companies, tip select investors about upcoming initiations during conferences. |
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| Keywords: | investor conferences equity analysts |
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