This study investigates signal validity in equity-based crowdfunding by examining whether signals that increase crowd participation are associated with higher post-offering success. Post-offering success is measured as the probability of survival. We use a hand-collected data set of 88 campaigns with over 64,000 investments and 742 updates from a well-established and leading German equity-based crowdfunding platform, Companisto. We find that indicating that the chief executive officer holds a university degree and a higher number of business-related updates are associated with a lower risk of failure, which is in line with recent research on offering success. The number of updates on external certification, promotions, and the team is associated with a higher risk of failure. In contrast to recent findings on offering success, we find that the equity share offered is positively related to post-offering success, whereas a high number of large investments or updates on campaign development are accompanied by a higher probability of failure. Our results provide guidance for entrepreneurs and investors regarding which signals are worth sending or using. Furthermore, these results suggest that investors are partly using wrong signals and challenge the rationality and wisdom of the crowd.

The well-known McKee formula was derived in 1963 for symmetric fluting constructions. This paper presents investigations showing the influence of asymmetric properties, either geometric or concerning the elastic moduli. Paper properties of the base papers used are taken to calculate the panel properties of corrugated boards. From these results, the box failure is predicted. To do this, a model approximating the corrugated medium by triangles is presented. With this assumption, the bending stiffness of corrugated board, no matter how many flutes, can be predicted from paper data. Machine direction and cross direction are treated separately. The theoretical considerations are verified by measuring paper parameters such as short compression test (SCT), thickness, and bending stiffness, as well as edge compression test (ECT) and bending stiffness of corrugated board and box compression test (BCT) of the boxes. It can be stated that the prediction of using paper data instead of corrugated board data may lead to even better prediction results, as the measuring of bending stiffness at the board may sometimes be influenced by sampling inconveniences. Finally, thickness of the used base papers, as well as thickness of the manufactured board, appear to be the main influencing parameters. The McKee formula is robust enough to be applied for asymmetric corrugated board as well.

This study investigates stock recommendations from the three largest finance subreddits on Reddit: wallstreetbets, investing and stocks. A simple strategy that buys recommended stocks weighted by the number of posts per day yields a portfolio with higher average returns at the expense of higher risks than the market for all holding periods, i.e., unfavorable Sharpe ratios. Furthermore, the strategy leads to positive (insignificant) short-term and negative (significant) long-term alphas when considering common risk factors. This is consistent with the idea of “meme stocks”, meaning that the recommended stocks are artificially inflated in the short term when they are recommended, and that the posts contain no information about long-term success. However, it is likely that Reddit users, especially on the subreddit wallstreetbets, have preferences for bets which are not captured by the mean–variance framework. Therefore, we draw on cumulative prospect theory (CPT). We find that the CPT-valuations of the Reddit portfolio exceed those of the market, which may explain the persistent attractiveness for investors to follow social media stock recommendations despite the unfavorable risk-return ratio.