The IPO Quiet Period Revisited

Journal Of Investment Management, Vol. 2, No. 3, Third Quarter 2004

Posted: 16 Sep 2004

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

Jack G. Wolf

Clemson University - Department of Finance

Abstract

Newly public companies are subject to a "quiet period" restricting insiders and affiliated underwriters from issuing earnings forecasts and research reports regarding the firm for a specified period following the initial public offering (IPO). As soon as this quiet period ends, the analysts of managing underwriters typically initiate research coverage with favorable recommendations, and the market responds positively even though this information is predictable. In this article, we discuss previous findings regarding price patterns and analyst initiations at the end of the quiet period and introduce new evidence based on recent trends in the IPO market. We discuss trading implications and examine the effect of new regulatory requirements that extend the quiet period from 25 to 40 calendar days post-IPO.

Keywords: Analyst initiations, Analyst recommendations, Quiet period, Initial Public Offerings

JEL Classification: G00

Suggested Citation

Bradley, Daniel and Jordan, Bradford D. and Ritter, Jay R. and Wolf, Jack G., The IPO Quiet Period Revisited. Journal Of Investment Management, Vol. 2, No. 3, Third Quarter 2004, Available at SSRN: https://ssrn.com/abstract=568463

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

Jack G. Wolf

Clemson University - Department of Finance ( email )

324-A Sirrine Hall
Clemson, SC 29634
United States
864-656-3954 (Phone)
864-656-3748 (Fax)

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