Journal
JOURNAL OF ACCOUNTING RESEARCH
Volume 55, Issue 2, Pages 275-327Publisher
WILEY
DOI: 10.1111/1475-679X.12164
Keywords
investor perception; valuation; CEO; IPO; roadshow
Categories
Funding
- Michelle R. Clayman Faculty Fellowship
- Kenan-Flagler Business School
- Deloitte Foundation
- Michael R. and Mary Kay Hallman Fellowship
- Ernst and Young
Ask authors/readers for more resources
This paper examines the relation between cognitive perceptions of management and firm valuation. We develop a composite measure of investor perception using 30-second content-filtered video clips of initial public offering (IPO) roadshow presentations. We show that this measure, designed to capture viewers' overall perceptions of a CEO, is positively associated with pricing at all stages of the IPO (proposed price, offer price, and end of first day of trading). The result is robust to controls for traditional determinants of firm value. We also show that firms with highly perceived management are more likely to be matched to high-quality underwriters. In further exploratory analyses, we find the impact is greater for firms with more uncertain language in their written S-1. Taken together, our results provide evidence that investors' instinctive perceptions of management are incorporated into their assessments of firm value.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available