Piggybacking and analysts' career concerns
In a series of recent papers, authors document piggybacking behavior by analysts, a phenomenon that occurs when analysts issue forecasts and recommendations soon after public release of news (e.g. Altinkilic and Hansen (2009), Altinkilic, Balashov, and Hansen (2013) and Loh and Stulz (2011)). This study investigates the association of analysts' piggybacking behavior and their career outcomes. Using different measures of piggybacking and career outcomes, and controlling for accuracy, optimism, boldness and experience, I find evidence that analysts who tend to piggyback more than their peers experience worse career outcomes in subsequent years. Piggybacking is defined using three different measures. The first measure is the fraction of all reports issued by an analyst during the year that follow a public release of earnings or company issued guidance. The second measure is the fraction of reports that follow a report by another analyst. The third measure of piggybacking is the fraction of stock recommendation changes that are not issued around public release of news and have intraday stock price jumps associated with them (as defined by Lee and Mykland (2008)). This fraction measures how often the analyst's recommendations move the market. The results show that analysts who often issue reports soon after release of public news and who follow reports by other analysts are more likely to be demoted and to leave the profession. Analysts whose recommendation changes have stock price jumps associated with them more often than those by peers experience better career outcomes. The result is not symmetric. Analysts are being punished if they piggyback but are not being rewarded if they do not. I interpret the findings as indicating that piggybacking is important to security analysts' career concerns.