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

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  • Bian, Shibo
  • Jia, Dekui
  • Li, Ruihai
  • Sun, Wujun
  • Yan, Zhipeng
  • Zheng, Yingfei

Abstract

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.

Suggested Citation

  • Bian, Shibo & Jia, Dekui & Li, Ruihai & Sun, Wujun & Yan, Zhipeng & Zheng, Yingfei, 2021. "Can management tone predict IPO performance? – Evidence from mandatory online roadshows in China," Pacific-Basin Finance Journal, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:pacfin:v:68:y:2021:i:c:s0927538x21000950
    DOI: 10.1016/j.pacfin.2021.101588
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    References listed on IDEAS

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    Cited by:

    1. Shuangyan Li & Guangrui Wang & Yongli Luo, 2022. "Tone of language, financial disclosure, and earnings management: a textual analysis of form 20-F," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-24, December.
    2. Feng, Guo & Tang, Bo & Wen, Jipeng & Yan, Shuo, 2022. "The effect on stock performance of executives' emotions during IPO roadshows," International Review of Financial Analysis, Elsevier, vol. 81(C).
    3. Jun Qi & Qinwei Chi & Ni Yang & Junyan Ouyang, 2023. "The Impact of the Tone of a Prospectus on IPO Underpricing: Evidence from China," Australian Accounting Review, CPA Australia, vol. 33(4), pages 375-390, December.
    4. Zhang, Shengpeng & Li, Yaokuang & Liang, Ruixin & He, Yu, 2024. "Does management tone matter in information disclosure? Evidence from IPO online roadshows in the SSE STAR market," International Review of Financial Analysis, Elsevier, vol. 94(C).
    5. Zhang, Da & Wang, Yuxia, 2024. "Can management tone predict the firm's decision on supply chain configuration?," Finance Research Letters, Elsevier, vol. 62(PB).
    6. Southam, Colette & Jiang, Guoliang (Frank) & Todd, James & Tonkin, Isaac, 2024. "Impact of post-IPO investments on the long-term financial market performance of Japanese IPOs: A preregistered report," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).
    7. Ding, Rui & Guo, Jintong & Zhang, Min, 2024. "Practice a poker face: Manager emotion and investor sentiment," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).

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    More about this item

    Keywords

    Textual analysis; Online roadshow; Management tone; First-day returns; Post-IPO operating performance;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • 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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