Abstract
Analysts who participate in earnings conference calls and get to ask the first questions are likely to enjoy special access to management. We argue that such access could either signal connectivity to management, or analyst stature/reputation recognized by management. We examine sell-side analysts’ labor market performance in brokerage closure events, and find that analysts’ prior early call participation predicts more successful and speedy job search. We find evidence that early participation reflects both connectivity to management and industry-specific skills: sell-side employers value both but buy-side employers do not seem to value connectivity to management of a particular stock. Consistent with the connectivity interpretation, we find that early call participants engage in greater strategic distortion between earnings forecasts and recommendations, and this is exacerbated when there is less institutional ownership.
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