Devin Shanthikumar

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Security analysts tend to bias stock recommendations upward, particularly if they are affiliated with the underwriter. We analyze how investors account for such distortions. Using the NYSE Trades and Quotations database, we find that large traders adjust their trading response downward: they exert buy pressure following strong buy recommendations, no(More)
Using options-and press-based proxies for CEO overconfidence (Malmendier and Tate 2005a, 2005b, 2008), we find that over the 1993-2003 period, firms with overconfident CEOs have greater return volatility, invest more in innovation, obtain more patents and patent citations, and achieve greater innovative success for given research and development (R&D)(More)
Traditional economic analysis of markets with asymmetric information assumes that the uninformed agents account for the incentives of the informed agents to distort information. We analyze whether investors in the stock market internalize such incentives in practice. Security analysts provide investors with information about investment opportunities by(More)
This paper tests whether traders react more strongly as a series of similar earnings surprises continues, as predicted by several important behavioral finance models. We compile measures of buying and selling from NYSE TAQ data for a large ten-year sample. Results show strong, consistent, evidence that small traders exhibit an increasing reaction – with(More)
We document the first systematic evidence on the characteristics and economic consequences of firms subject to employee allegations of corporate financial misdeeds. First, compared to a control group that avoided public whistle-blowing allegations , firms subject to whistle-blowing allegations were characterized by unique firm-specific factors that led(More)
Traditional economic analysis of markets with asymmetric information assumes that the uninformed agents account for incentives of the informed agents to distort information. We analyze whether investors in the stock market are able to account for such incentive distortions. Security analysts provide investors with information about investment opportunities(More)
Using a sample of secured syndicated loans, I explore the use of intangible assets as loan collateral and whether this credit practice was an innovation or a negative mutation in the corporate loan market. While intangible assets were not traditionally considered as eligible collateral, I find that twenty-one percent of U.S.-originated secured syndicated(More)
We document consistent return patterns related to round numbers. We examine returns following previous day closing prices that are just above or below round number benchmarks. We find, for one-digit, two-digit and three-digit levels, that returns following closing prices just above a round number benchmark are significantly higher than returns following(More)
P rior research on equity analysts focuses almost exclusively on those employed by sell-side investment banks and brokerage houses. Yet investment firms undertake their own buy-side research, and their analysts face different stock selection and recommendation incentives than their sell-side peers. We examine the selection and performance of stocks(More)
We test the hypotheses that (i) poor accounting quality is associated with delayed stock price adjustment to information, and (ii) investors require higher future stock returns for the price delay associated with poor accounting quality. We define accounting quality as the precision with which financial reporting informs equity investors about future cash(More)