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Non‐Deal Roadshows, Informed Trading, and Analyst Conflicts of Interest

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  • DANIEL BRADLEY
  • RUSSELL JAME
  • JARED WILLIAMS

Abstract

Non‐deal roadshows (NDRs) are private meetings between management and institutional investors, typically organized by sell‐side analysts. We find that around NDRs, local institutional investors trade heavily and profitably, while retail trading is significantly less informed. Analysts who sponsor NDRs issue significantly more optimistic recommendations and target prices, together with more “beatable” earnings forecasts, consistent with analysts issuing strategically biased forecasts to win NDR business. Our results suggest that NDRs result in a substantial information advantage for institutional investors and create significant conflicts of interests for the analysts who organize them.

Suggested Citation

  • Daniel Bradley & Russell Jame & Jared Williams, 2022. "Non‐Deal Roadshows, Informed Trading, and Analyst Conflicts of Interest," Journal of Finance, American Finance Association, vol. 77(1), pages 265-315, February.
    • Handle: RePEc:bla:jfinan:v:77:y:2022:i:1:p:265-315
    DOI: 10.1111/jofi.13089
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    2. David Ardia & Cl'ement Aymard & Tolga Cenesizoglu, 2024. "Revisiting Boehmer et al. (2021): Recent Period, Alternative Method, Different Conclusions," Papers 2403.17095, arXiv.org.
    3. Daniel Bradley & Jan Hanousek & Russell Jame & Zicheng Xiao, 2024. "Place Your Bets? The Value of Investment Research on Reddit’s Wallstreetbets," The Review of Financial Studies, Society for Financial Studies, vol. 37(5), pages 1409-1459.

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