The effect on stock performance of executives' emotions during IPO roadshows

This paper describes the correlation between executives' emotions expressed at IPO online roadshows and post-IPO stock performance in the Chinese stock market. The executives' emotion is quantified by face recognition models used for analyzing facial expressions during the IPO roadshows. Our results show that the more negative emotions are expressed by executives at the roadshow, the lower the short-term stock returns after IPO, and this finding is stronger for firms with limited information disclosure. These results are robust to the implementation of an instrumental variable strategy using Air Quality Index or Comfort Index of Human Body as the instrumental variable, various measures of management emotions, and the subsample analysis in which the financial firms and industries has the limited number of firms are excluded.