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

53 Pages Posted: 13 Sep 2021 Last revised: 31 Jul 2024

See all articles by Stacey Choy

Stacey Choy

University of Illinois at Urbana-Champaign - Gies College of Business

Ole-Kristian Hope

University of Toronto - Rotman School of Management

Date Written: July 30, 2024

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

Suggested Citation

Choy, Stacey and Hope, Ole-Kristian, Private Communication between Managers and Financial Analysts: Evidence from Taxi-Ride Patterns in New York City (July 30, 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 Illinois at Urbana-Champaign - Gies College of Business ( email )

1206 South 6th Street
IL 61820

HOME PAGE: http://stacey-choy.github.io/

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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