Analyst Tipping: Additional Evidence

Journal of Business Finance & Accounting (JBFA), Forthcoming.

36 Pages Posted: 20 May 2011 Last revised: 6 Feb 2017

See all articles by Stanimir Markov

Stanimir Markov

University of Texas at Dallas - Naveen Jindal School of Management

Volkan Muslu

C.T. Bauer College of Business University of Houston

Musa Subasi

University of Maryland-College Park - Robert H. Smith School of Business

Date Written: October 28, 2016

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 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.

Keywords: information leakage, equity analysts, investor conferences

JEL Classification: G11, G18, G24

Suggested Citation

Markov, Stanimir and Muslu, Volkan and Subasi, Musa, Analyst Tipping: Additional Evidence (October 28, 2016). Journal of Business Finance & Accounting (JBFA), Forthcoming. . Available at SSRN: https://ssrn.com/abstract=1845812 or http://dx.doi.org/10.2139/ssrn.1845812

Stanimir Markov

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States
972 883 5166 (Phone)

Volkan Muslu

C.T. Bauer College of Business University of Houston ( email )

4750 Calhoun Road
Houston, TX 77204
United States
713 7434924 (Phone)

Musa Subasi (Contact Author)

University of Maryland-College Park - Robert H. Smith School of Business ( email )

University of Maryland-College Park
4332N Van Munching Hall
College Park, MD 20742
United States
301-314-1055 (Phone)

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