Perceptions and Price: Evidence from CEO Presentations at IPO Roadshows

72 Pages Posted: 30 May 2015 Last revised: 5 May 2017

See all articles by Elizabeth Blankespoor

Elizabeth Blankespoor

University of Washington - Michael G. Foster School of Business

Bradley E. Hendricks

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Gregory S. Miller

University of Michigan, Stephen M. Ross School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: January 4, 2017

Abstract

This paper examines the relation between cognitive perceptions of management and firm valuation. We develop a composite measure of investor perception using 30-second content-filtered video clips of initial public offering (IPO) roadshow presentations. We show that this measure, designed to capture viewers’ overall perceptions of a CEO, is positively associated with pricing at all stages of the IPO (proposed price, offer price and end of first day of trading). The result is robust to controls for traditional determinants of firm value. We also show that firms with highly perceived management are more likely to be matched to high-quality underwriters. In further exploratory analyses, we find the impact is greater for firms with more uncertain language in their written S-1. Taken together, our results provide evidence that investors’ instinctive perceptions of management are incorporated into their assessments of firm value.

Keywords: investor perception, valuation, CEO, IPO, roadshow

JEL Classification: G12, G14, M12, M13, M41

Suggested Citation

Blankespoor, Elizabeth and Hendricks, Bradley E. and Miller, Gregory S., Perceptions and Price: Evidence from CEO Presentations at IPO Roadshows (January 4, 2017). Journal of Accounting Research, Vol 55, No. 2, May 2017; Stanford University Graduate School of Business Research Paper No. 15-35; Rock Center for Corporate Governance at Stanford University Working Paper No. 206. Available at SSRN: https://ssrn.com/abstract=2611756 or http://dx.doi.org/10.2139/ssrn.2611756

Elizabeth Blankespoor (Contact Author)

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

Bradley E. Hendricks

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States
(919) 962-3619 (Phone)

Gregory S. Miller

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

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