References (15)



Nomen est Omen: How Company Names Influence Short- and Long-Run Stock Market Performance

Pascal Pensa

University of Basel - Department of Finance

September 2006

I use a survey methodology to obtain consensus ratings of 64 Swiss company names. The survey evidence suggests that simple cognitive company name characteristics do affect the buy and sell decision of respondents. Furthermore, I find that respondents attribute positive stock performance rather to a nice name than to an ugly name. In the empirical results I present new evidence on IPO underpricing for the Swiss stock market. Further results indicate that not only do firms with a favourable name rating exhibit significantly higher initial returns upon going public, but also exhibit higher (abnormal) stock returns up to 10 trading days after the initial offering. Subsample analysis and the application of standard benchmark-adjusted return measurement techniques reveals that the effect correlates highly with hot issue markets.

Number of Pages in PDF File: 18

Keywords: initial public offerings, hot markets, bubbles, heuristics

JEL Classification: G12, G14, G32

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Date posted: August 15, 2006  

Suggested Citation

Pensa, Pascal, Nomen est Omen: How Company Names Influence Short- and Long-Run Stock Market Performance (September 2006). Available at SSRN: http://ssrn.com/abstract=924171 or http://dx.doi.org/10.2139/ssrn.924171

Contact Information

Pascal Pensa (Contact Author)
University of Basel - Department of Finance ( email )
Holbeinstrasse 12
Basel, CH-4051
+41612673318 (Phone)
+41612670898 (Fax)
HOME PAGE: http://www.wwz.unibas.ch/finance/team/pensa/
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