Do Sell-Side Analysts Say “Buy” While Whispering “Sell”?

David Hirshleifer, Yushui Shi and Weili Wu ()

No 30032, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study here say-buy/whisper-sell behavior wherein analysts issue optimistic recommendations to attract retail investors while providing more accurate information to fund managers in private, sometimes resulting in fund managers selling the recommended stocks. We test whether fund managers return the favor using their votes for analysts in a Chinese “star analyst” competition. Managers are more likely to vote for analysts who exhibit greater “say-buy/whisper-sell” behavior toward these managers. This suggests that analysts reduce the accuracy of their public recommendations, thereby maintaining the value of their private advice to funds. Our findings help explain several empirical puzzles about analyst public recommendations.

JEL-codes: G12 G14 G2 G23 G24 G3 M41 (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-fmk and nep-mst
Note: AP CF
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Published as David Hirshleifer & Yushui Shi & Weili Wu, 2024. "Do sell-side analysts say “buy” while whispering “sell”?," Review of Finance, vol 28(4), pages 1275-1310.

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Journal Article: Do sell-side analysts say “buy” while whispering “sell”? (2024)
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