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

Abstract

This study constructs a novel measure of face-to-face private communications between firm managers and sell-side analysts by mapping New York City taxi trip records to company and brokerage locations. Consistent with earnings announcement dates (EAD) prompting needs for private communications, we observe increased ride volumes around EAD. Post-EAD ride volume increases are associated with lower analysts' earnings forecast errors and higher recommendation profitability. In contrast, pre-EAD ride volume increases explain analysts' downward adjustment of near-term earnings forecasts to create small positive earnings surprises. These results suggest that the timing and context of in-person meetings can influence the information analysts acquire.

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

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