Managing News Coverage around Initial Public Offerings
The unique features of the regulatory environment in Taiwan where IPO firms are required to disclose their own earnings forecasts as part of the IPO application process and are unrestricted in releasing news around the offerings allow us to investigate their opportunistic behaviour from entirely new perspectives. We find that prior to the offerings, IPO firms tend to report higher earnings, disclose overoptimistic earnings forecasts, and manage more good news. When considered altogether, the news management practice emerges as the most influential factor on post-IPO stock prices. In particular, news reports tend to be forward looking when they are positive about the IPO firms but mostly backward looking when the bad events have already been realized. Furthermore, IPO firms prefer to release good news related to Strategy/Policy, which is relatively easy to make since news of the type only provides a vision of a firm’s future. Our evidence seems to justify the strict enforcement of gun-jumping prohibition regulation, typified by section 5(c) of the 1933 Security Act in the U.S.
Earnings management Earnings forecasts News management Initial public offerings and Taiwan stock market
Chia-Cheng Ho Chi-Ling Huang Chien-Ting Lin
Department of Finance College of Management National Chung Cheng University Chia-Yi, Taiwan, Republi Adelaide Graduate School of Business & School of Commerce University of Adelaide 233 North Terrace A
国际会议
昆明
英文
1-47
2005-07-05（万方平台首次上网日期，不代表论文的发表时间）