Please Sir, I Want Some More...Analyst Coverage

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With the paring down of sell-side research groups, more and more companies are orphaned without analyst coverage. According to a new study, the fate of orphans is usually not a good one. Orphans are much more likely to turn to a life of underperformance than their covered stepbrothers. There are early warning signs with these troubled youths, as they pickpocket shrinking research resources and generate meager investment banking revenue.
According to the study, an orphaned company is 26% more likely to be delisted, although research groups often leave orphans on the steps of a PE firm or other company. Half of delisted orphans go into liquidation, while 42% get acquired.
A Sad Tale of Wall Street’s Orphans [DealBook]

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