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Survey Says: Gesticulate Wildly During Your IPO Roadshow

No, really. This is a thing.
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Something like this.

That is, if you want your stock to price roughly 10% more than it’s worth. It’s science, and cheaper than plastic surgery.

The more a chief executive’s gestures and manners exude competence during investor pitch sessions, or the CEO is viewed as attractive or trustworthy, the more likely he or she is to have a higher-priced IPO, according to the study conducted by Elizabeth Blankespoor of Stanford University’s Graduate School of Business, Bradley Hendricks of the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill, and Gregory Miller of the Stephen M. Ross School of Business at the University of Michigan….

They found that perceptions of the CEO are a strong predictor of an IPO’s price. The study found that for the average CEO, a 5% higher rating on perceptions correlated to an IPO price roughly 11% higher than the price that would be expected based on fundamentals alone….

A high rating on a CEO’s competence was the best predictor of a higher IPO price, followed by attractiveness. Trustworthiness was the least important factor, though it still mattered.

Can You Judge an IPO by Its CEO? [WSJ MoneyBeat blog]


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