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http://ssrn.com/abstract=1959613
 
 

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What are We Meeting For? The Consequences of Private Meetings with Investors


David H. Solomon


University of Southern California - Marshall School of Business

Eugene F. Soltes


Harvard Business School

January 30, 2013


Abstract:     
Using a unique dataset of all one-on-one meetings between senior management and investors for an NYSE-traded firm, we investigate the impact of these private meetings on investor decisions. We find evidence that investors who meet privately with management make more informed trading decisions in periods when they meet, increasing their position before periods of high returns and decreasing their positions before periods of low returns. This improved timing ability is concentrated in hedge funds, and does not appear to be driven by fixed investor skill, investors communicating with each other, or investors endogenously choosing to meet simply when they have pre-existing private information. The increase in timing ability is larger during periods of greater uncertainty and more public information availability, consistent with a mosaic theory of investing. Our results suggest that, despite the passage of Regulation Fair Disclosure, private meetings help a subset of investors make more informed trading decisions.

Number of Pages in PDF File: 47

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Date posted: November 16, 2011 ; Last revised: March 6, 2013

Suggested Citation

Solomon, David H. and Soltes, Eugene F., What are We Meeting For? The Consequences of Private Meetings with Investors (January 30, 2013). Available at SSRN: http://ssrn.com/abstract=1959613 or http://dx.doi.org/10.2139/ssrn.1959613

Contact Information

David H. Solomon
University of Southern California - Marshall School of Business ( email )
Los Angeles, CA 90089
United States
Eugene F. Soltes (Contact Author)
Harvard Business School ( email )
Boston, MA 02163
United States
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