Research: a nicer director - a better IPO

    A group of researchers from Stanford, the University of North Carolina and the University of Michigan found that the appearance of the company's CEO affects the value of shares during an IPO, writes the Wall Street Journal . The study involved nine hundred random people who evaluated the appearance and manners of two hundred and twenty-four CEOs of companies: respondents watched thirty-second presentations of company heads without sound.

    Elon Musk . Tesla Motors began to be quoted on the NASDAQ on June 29, 2010.

    The human brain evaluates other people by observing appearance and manners. Study participantsappreciated the attractiveness and competence of the heads of companies and the extent to which the CEOs trust them. Presentations were silent, so that respondents could not evaluate the information from the presentation.

    Directors of companies whose stock price at initial offering was 11% higher than expected on the basis of a fundamental forecast, received an assessment according to the three indicated criteria above the average by 5%. A year after the IPO, these companies continue to show good results. The main role was played by competence, in second place - the attractiveness of the director, in third - the ability to inspire confidence.

    In addition to forecasts of profitability, management quality and market share data, the appearance of the company's top managers is also important for investors. Stanford study author Elizabeth Blankspur of the Graduate School of Business notes: “You have all the numbers in the prospectus. You know the whole ins and outs of the CEO. So why are you meeting him? ”

    In the Wall Street Journal, you can check if you can choose the best investment company for CEO appearance based on the gif without sound.


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