ICO Analysts

University of Zurich - Department of Banking and Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute

There are 2 versions of this paper

Date Written: May 26, 2021

Abstract

Initial Coin Offerings (ICOs) provide a clean opportunity and rich data to study the contribution of analysts to the functioning of capital markets. The assessments of freelancing ICO analysts vary in quality and exhibit biases due to the reciprocal interactions of analysts with ICO team members. Ratings predict ICO success, but imperfectly. Even favorably rated ICOs tend to fail when a greater portion of their ratings reciprocate prior ratings. Failure despite strong ratings is also frequent when analysts have a history of optimism, and when reviews strike a particularly positive tone. These findings suggest that information about the track record of analysts and their potentially conflicting activities is valuable to investors.

Keywords: Analysts, Asymmetric Information, FinTech, Initial Coin Offering (ICO)

JEL Classification: G14, G24, L26, D82, D83

Suggested Citation: Suggested Citation

Barth, Andreas and Laturnus, Valerie and Mansouri, Sasan and Wagner, Alexander F., ICO Analysts (May 26, 2021). Swiss Finance Institute Research Paper No. 21-26, Available at SSRN: https://ssrn.com/abstract=3720758 or http://dx.doi.org/10.2139/ssrn.3720758