Private Communication between Managers and Financial Analysts: Evidence from Taxi Ride Patterns in New York City

53 Pages Posted: 13 Sep 2021 Last revised: 26 Apr 2024

See all articles by Stacey Choy

Stacey Choy

University of Toronto - Rotman School of Management

Ole-Kristian Hope

University of Toronto - Rotman School of Management

Date Written: April 25, 2024

Abstract

This study constructs a novel measure that aims to capture face-to-face private communications between firm managers and sell-side analysts by mapping detailed, large-volume taxi trip records from New York City to the GPS coordinates of companies and brokerages. Consistent with earnings releases prompting the need for private communications, we observe daily taxi ride volumes between companies and brokerages increase around earnings announcement dates (EAD). We find that the increase in ride volumes following EAD is negatively associated with analysts’ earnings forecast errors, with a more pronounced association when earnings announcements are bundled with more public disclosures. In contrast, the increase in ride volumes before EAD explains analysts’ downward adjustment of near-term earnings forecasts to create small positive earnings surprises. Taken together, our results suggest that analysts may learn different information depending on the timing and context of in-person meetings.

Keywords: Private Communications, Sell-Side Analysts, Taxis, Private Information, Earnings Forecasts, Stock Recommendations, Profitability of Stock Recommendations, Earnings Announcements, Reg FD

JEL Classification: G00, G14, G18, G24, G28, G30, G38, M10, M40, M41, M48

Suggested Citation

Choy, Stacey and Hope, Ole-Kristian, Private Communication between Managers and Financial Analysts: Evidence from Taxi Ride Patterns in New York City (April 25, 2024). Rotman School of Management Working Paper No. 3920680, Available at SSRN: https://ssrn.com/abstract=3920680 or http://dx.doi.org/10.2139/ssrn.3920680

Stacey Choy

University of Toronto - Rotman School of Management ( email )

Toronto, Ontario
Canada

HOME PAGE: http://www.rotman.utoronto.ca/Degrees/PhD/PhDStudentBios/Stacey-Choy

Ole-Kristian Hope (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Hope.aspx

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