Research Summary
Research Summary
Sell-Side Analysts and Corporate Spinoffs
Description
This study investigates the information content and accuracy of analyst reports written about companies that are about to undertake equity spinoffs. This research is among the first to provide a detailed look at the extent to which analysts evaluate upcoming corporate spinoffs, establishing that analysts' coverage of pre-spinoff subsidiaries is much less detailed than their coverage of the parent companies. Moreover, while the level of detail provided about parent companies is quite significantly related to subsequent forecast accuracy, the same is not true for the pre-spinoff subsidiaries.