Analyst Tipping: Additional Evidence
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 twenty 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.
information leakage, equity analysts, investor conferences
SMU Cox: Accounting (Topic)