John At The Center

Haas School of Business.
Sloan says the results are “both striking and surprising, because we teach that stock markets are efficient and based on fundamentals.” The results suggest that investors, analysts, and corporate managers should pay attention to changes in investor recognition. They also shed light on why companies hire investor relations professionals and investment bankers and explain why non-fundamental events, such as index additions and initiation of analyst coverage, cause stock prices to increase.