Nomen est Omen: How Company Names Influence Short- and Long-Run Stock Market Performance

Pascal Pensa
2006 Social Science Research Network  
I use a survey methodology to obtain consensus ratings of 64 Swiss company names. The survey evidence suggests that simple cognitive company name characteristics do affect the buy and sell decision of respondents. Furthermore, I find that respondents attribute positive stock performance rather to a "nice" name than to an "ugly" name. In the empirical results I present new evidence on IPO underpricing for the Swiss stock market. Further results indicate that not only do firms with a favourable
more » ... with a favourable name rating experience significantly higher initial returns upon going public, but also experience higher (abnormal) stock returns up to 10 trading days after the initial offering. Subsample analysis and the application of standard benchmarkadjusted return measurement techniques reveals that the effect correlates highly with "hot" issue markets. doctoral seminar participants at Erlach/St. Petersinsel for valuable comments and/or inputs during the development phase.
doi:10.2139/ssrn.924171 fatcat:gxq2cxcqujafvekrnh6yq7r7fe