The Quiet Period Goes Out with a Bang

Posted: 4 Jun 2003

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 the expiration of the IPO quiet period, which occurs after the 25th calendar day following the offering. For IPOs during 1996 to 2000, we find that analyst coverage is initiated immediately for 76 percent of these firms, almost always with a favorable rating. Initiated firms experience a five-day abnormal return of 4.1 percent versus 0.1 percent for firms with no coverage. The abnormal returns are concentrated in the days just before the quiet period expires. Abnormal returns are much larger when coverage is initiated by multiple analysts. It does not matter whether a recommendation comes from the lead underwriter or not.

Suggested Citation

Bradley, Daniel and Jordan, Bradford D. and Ritter, Jay R., The Quiet Period Goes Out with a Bang. Available at SSRN: https://ssrn.com/abstract=377107

Daniel Bradley

University of South Florida ( email )

Tampa, FL 33620
United States

Bradford D. Jordan (Contact Author)

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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