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The Impact Of Nasd Rule 2711 And Nyse Rule 472 On Analyst Behavior: The Strategic Timing Of Recommendations Issued On Weekends, Yi Dong, Nan Hu
The Impact Of Nasd Rule 2711 And Nyse Rule 472 On Analyst Behavior: The Strategic Timing Of Recommendations Issued On Weekends, Yi Dong, Nan Hu
Research Collection School Of Computing and Information Systems
Amendments to NASD Rule 2711 and NYSE Rule 472, enacted in May 2002, mandate that sell-side analysts disclose the distribution of their security recommendations by buy, hold and sell category. This regulation enhances the transparency of analysts' information and mitigates the long-recognized optimistic bias in their recommendations. However, we find that analysts are more likely to issue sell recommendations or downgrade revisions on weekends when investors have limited attention after these rule changes. This pattern is more pronounced for prestigious analysts, who are more likely to influence stock prices. Market reaction tests reveal an incomplete immediate response and a greater …
Not All That Glitters Is Gold: The Effect Of Attention And Blogs On The Investors' Investing Behaviors, Nan Hu, Yi Dong, Ling Liu, Lee J. Yao
Not All That Glitters Is Gold: The Effect Of Attention And Blogs On The Investors' Investing Behaviors, Nan Hu, Yi Dong, Ling Liu, Lee J. Yao
Research Collection School Of Computing and Information Systems
This article investigates the relationship between a firm’s visibility in blogspaces, termed blog exposure, and the cross-sectional stock returns. We show that blog exposure is fundamentally different from the traditional media coverage, and securities with low blog exposure earn higher returns than stocks with high blog exposure. We further illustrate that such an effect is more prominent for stocks with low institutional ownership. Contrary to traditional media coverage, the return premium associated with blog exposure cannot be explained by either the illiquidity hypothesis or the investor recognition hypothesis based on the rational-agent framework. Instead, our results suggest that blog effect …