Analyst Tipping: Additional Evidence
Journal of Business Finance & Accounting 44 (2017), 94-115.
36 Pages Posted: 20 May 2011 Last revised: 11 May 2020
Date Written: October 28, 2016
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: Suggested Citation