The Quiet Period Goes out with a Bang

doi:10.1111/1540-6261.00517

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Wiley InterScience

The Journal of Finance

Volume 58 Issue 1, Pages 1 - 36

Published Online: 12 Feb 2003

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ABSTRACT

We examine the expiration of the IPO quiet period, which occurs after the 25^th 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.

DIGITAL OBJECT IDENTIFIER (DOI)

10.1111/1540-6261.00517 About DOI