No, it is NOT true that all companies issuing research reports (they aren't "ratings") have something to in particular to gain from specfic research reports. Some do, some don't.
Many firsm issue reports strictly as a service to customers. Yes, this is done in order to stimulate trading and increase volume of business. So, in THAT sense I suppose you'd say that they benefit from them, but in those cases, they don't have a vested interest.
I think it's important to understand whether or not the firm issuing a report has a vested interest in the company they are reporting on. Generally, positive reports issued by firms that are not a MM or underwriter are considered much more important than those issued by firms that have a vested interest.
With IPOs, there is always a great deal of anticipation for the first report issued by a non-underwriter. This is often thought of as the first real test for an IPO, and many funds will not invest until this happens.
Not saying that this report isn't of some use - for example, it reports some numbers that were not previously known. But it is important to put it in perspective and realize the bias of the firm that issued it.
Those who posted this report without disclosing that the firm that issued it is a MM in ESVS left out important and valuable information, which painted an incomplete, inaccurate, and deceptive picture of the report. |
