Pre-IPO Hype by Affiliated Analysts: Motives and Consequences

Autor:	Xinjian Shao, Yiming Qian, Jingchi Liao
Rok vydání:	2019
Předmět:	History Polymers and Plastics Ask price Financial economics Price efficiency Business Business and International Management Initial public offering Industrial and Manufacturing Engineering Stock (geology) Underwriting
Zdroj:	SSRN Electronic Journal.
ISSN:	1556-5068
DOI:	10.2139/ssrn.3476735
Popis:	We provide the first study of underwriter-affiliated analysts’ pre-IPO research coverage and its impact on stock prices. Using proprietary data on a sample of Chinese IPOs, we document that affiliated analysts make highly overoptimistic forecasts about IPO clients. Analyst hype inflates both the offer price and the postmarket price. Consistent with the sentiment theory, IPO investors are insensitive to analyst hype because the offer price is set sufficiently lower than the postmarket price. We utilize a regulatory change as a quasi-experiment to establish that pre-IPO analyst bias is due to intentional hype. Our analysis contributes to the debate about recent US regulatory changes on pre-IPO analyst coverage.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::b92a285ea1072fad619717ab2fa55463 https://doi.org/10.2139/ssrn.3476735 Zobrazit plný text záznamu