All-Star Analyst Turnover, Investment Bank Market Share, and the Performance of Initial Public Offerings

41 Pages Posted: 20 Jan 2003

See all articles by Jonathan Clarke

Jonathan Clarke

Georgia Institute of Technology - Scheller College of Business

Craig G. Dunbar

Ivey Business School, Western University

Kathleen M. Kahle

University of Arizona - Department of Finance

Date Written: November 12, 2002

Abstract

The impact of all-star analyst turnover on initial public offering market share and the performance of initial public offerings is examined. Overall, we find that neither "winners" nor "losers" in the battle for all-star analysts experience a significant change in market share. In order to offset the loss of a star analyst, investment banks become more aggressive by taking on more speculative deals. The banks gaining the all-stars also take on more speculative issuers. Although forecast accuracy increases following the arrival of a star, forecast optimism does not change, which suggests that analyst objectivity is not affected. Overall, the evidence is not consistent with the commonly held view that analysts have a significant impact on a bank's ability to attract IPO deal flow.

Keywords: IPO, all-star analyst, market share, underpricing, IPO performance

JEL Classification: G24, G32

Suggested Citation

Clarke, Jonathan and Dunbar, Craig G. and Kahle, Kathleen M., All-Star Analyst Turnover, Investment Bank Market Share, and the Performance of Initial Public Offerings (November 12, 2002). Available at SSRN: https://ssrn.com/abstract=350682 or http://dx.doi.org/10.2139/ssrn.350682

Jonathan Clarke

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States
404-894-4929 (Phone)
404-894-6030 (Fax)

HOME PAGE: http://mgt.gatech.edu/directory/clarke.html

Craig G. Dunbar (Contact Author)

Ivey Business School, Western University ( email )

1255 Western Road
Room 2309
London, Ontario N6G 0N1
Canada
519-661-3716 (Phone)
519-661-3963 (Fax)

Kathleen M. Kahle

University of Arizona - Department of Finance ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States
520-621-7489 (Phone)

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