Can management tone predict IPO performance? – Evidence from mandatory online roadshows in China

In this study, we investigate the relation between the sentiment of online roadshow texts and IPO first-day returns as well as post-IPO operating performancein China's stock market. Our results suggest that a higher positive tone in management's responses and comments during online roadshows is significantly associated with greater first-day returns. The results also show that the management tone is significantly and positively related to post-IPO operating performance. Our study indicates that the tone of online roadshows is informative and its information content has important implications for understanding IPO first-day returns and future operating performance in China's stock market.