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Orphan versus non-orphan IPOs: the difference analyst coverage makes

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  • Boissin, Romain

Abstract

This paper addresses the question of the importance of analyst coverage for the long-run returns of IPO firms over the period from 1991 to 2010. In US IPOs, during the one- to five-year horizon, we find a significant long-run abnormal performance by orphans (IPOs without analyst coverage) compared to non-orphans (IPOs with analyst coverage.Further analysis reveals that this outperformance by non-orphans stems from high analyst coverage. Our results are robust after accounting for venture capital backing, underwriting syndicates, underpricing, institutional investor ownership, or operating performance variables.

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  • Boissin, Romain, 2012. "Orphan versus non-orphan IPOs: the difference analyst coverage makes," MPRA Paper 41584, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:41584
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    More about this item

    Keywords

    IPOs; analyst coverage; long-run performance;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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