Analyst Behavior Following IPOs: The Bubble Period Evidence

Posted: 25 Jun 2008

See all articles by Daniel Bradley

Daniel Bradley

University of South Florida

Bradford D. Jordan

University of Florida; University of Florida - Department of Finance, Insurance and Real Estate

Jay R. Ritter

University of Florida - Department of Finance, Insurance and Real Estate

Abstract

We examine over 7400 analyst recommendations made in the year after going public for IPOs from 1999 to 2000. Initiations of coverage at the end of the quiet period come almost exclusively from affiliated analysts, whereas initiations afterward are predominantly from unaffiliated analysts. Contrary to previous findings, we find no evidence that the market discounts recommendations from affiliated analysts once we control for recommendation characteristics and timing. Moreover, analyst coverage in the first year is not affected by underpricing, and after the flurry of initiations at the end of the quiet period, the number of analysts covering a firm during the following 11 months is unrelated to the number of managing underwriters.

JEL Classification: G12, G14, G24

Suggested Citation

Bradley, Daniel and Jordan, Bradford D. and Ritter, Jay R., Analyst Behavior Following IPOs: The Bubble Period Evidence. The Review of Financial Studies, Vol. 21, No. 1, pp. 101-133, 2008, Available at SSRN: https://ssrn.com/abstract=1151149 or http://dx.doi.org/10.1093/rfs/hhl028

Daniel Bradley (Contact Author)

University of South Florida ( email )

Tampa, FL 33620
United States

Bradford D. Jordan

University of Florida ( email )

Gainesville, FL 32611
United States

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611
United States

Jay R. Ritter

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611
United States
(352) 846-2837 (Phone)
(352) 392-0301 (Fax)

HOME PAGE: http://https://site.warrington.ufl.edu/ritter

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