IPO's Market Performance Study Based On The Analysis Of The Emotion In Media Coverage

Media is an important platform for evaluating a company and also connecting information between individuals and companies.Since the 1990 s,scholars have begun to pay attention to the role of media in corporate governance by influencing public opinion.In recent years,more scholars in academia have turned their attention to the study of media reports.The primary focus of these scholars is the correlation between asset price and media coverage.With the development of financial theory,the theoretical circle has paid more and more attention to the correlation between IPO stock volatility and news reports,especially the first day IPO underpricing and news reports.This paper mainly studies the relationship between IPO market performance and the media tone in the news reports during the period of 2009-2016.First we reference the foreign financial field experience,on the study of the emotional words according to the professional vocabulary in Chinese language and Chinese habit,according to the China securities regulatory commission(CSRC)industry classification standard,respectively,the reports of 19 industry a lot of reading,and screen out the emotional vocabulary,to build a new thesaurus.According to the media attitude in media reports,this paper divides emotional vocabulary into two categories: positive words to convey good information and negative words to imply bad news.Subsequently,text analysis was used to measure the influence of emotional words in news reports.It is verified that the higher the content of deterministic emotional words in the media reports of the IPO,the lower the price reduction rate on the first day of listing.Secondly,it verifies the relationship between media tone and stock price volatility after IPO,that is,the higher the content of deterministic emotional vocabulary,the less obvious the stock price volatility after IPO.Finally,in the long run,IPO stocks perform worse for companies with high negative words.For companies with high positive vocabulary,IPO stocks performed better.This indicates that the deterministic words in the news reports about the state of the company are related to the long-term performance of newly listed stocks.