Can management tone predict IPO performance? – Evidence from mandatory online roadshows in China

In this study, we investigate the relation between the sentiment of online roadshow texts and IPO first-day returns as well as post-IPO operating performancein China's stock market. Our results suggest that a higher positive tone in management's responses and comments during online roadsho...

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Bibliographic Details
Published in:Pacific-Basin finance journal 2021-09, Vol.68, p.101588, Article 101588
Main Authors: Bian, Shibo, Jia, Dekui, Li, Ruihai, Sun, Wujun, Yan, Zhipeng, Zheng, Yingfei
Format: Article
Language:English
Subjects:
First-day returns
Management tone
Online roadshow
Post-IPO operating performance
Textual analysis
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Summary:In this study, we investigate the relation between the sentiment of online roadshow texts and IPO first-day returns as well as post-IPO operating performancein China's stock market. Our results suggest that a higher positive tone in management's responses and comments during online roadshows is significantly associated with greater first-day returns. The results also show that the management tone is significantly and positively related to post-IPO operating performance. Our study indicates that the tone of online roadshows is informative and its information content has important implications for understanding IPO first-day returns and future operating performance in China's stock market. •The relation between the sentiment of online roadshow texts and IPO performance is investigated.•A higher positive tone of management during online roadshows is significantly associated with greater first-day returns.•The management tone is significantly and positively related to post-IPO operating performance.
ISSN:0927-538X
1879-0585
DOI:10.1016/j.pacfin.2021.101588