55 Pages Posted: 5 Sep 2012 Last revised: 24 Dec 2016
Date Written: December 18, 2016
We examine whether corporate jet flight patterns can be used to identify private meetings between managers and investors that are ex ante unobservable to non-participants. Using a sample of almost 400,000 flights undertaken by 396 firms between 2007 and 2010, we proxy for private meetings with “roadshows,” which are three-day windows that include jet flights to money center cities and to non-money-center cities in which the firm has high institutional ownership. First, we find that the number of roadshows is significantly associated with a number of proxies for incentives to meet privately with investors. Second, we find that roadshows exhibit significantly greater abnormal stock market reactions and analyst forecast activity than other flight windows. Finally, we show that roadshows are associated with greater absolute changes in local institutional ownership, as well as with positive trading gains in firms with high uncertainty and with fewer prior flights to the area. Overall, our evidence suggests that these private meetings are an important information event for the participating investors, who potentially gain an advantage over nonparticipating investors who have no public notice of the meetings.
Keywords: Selective disclosure, Corporate jets, Institutional investors
JEL Classification: G14
Suggested Citation: Suggested Citation
Bushee, Brian J. and Gerakos, Joseph J. and Lee, Lian Fen, Corporate Jets and Private Meetings with Investors (December 18, 2016). Available at SSRN: https://ssrn.com/abstract=2141878 or http://dx.doi.org/10.2139/ssrn.2141878