Wisdom of the crowd and stock price crash risk: evidence from social media

Hossain, Miran; Mammadov, Babak; Vakilzadeh, Hamid

doi:10.1007/s11156-021-01007-x

Cited by 16 publications

(5 citation statements)

References 44 publications

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“…In that case, the manager's behaviors have a crucial impact on stock prices through social media. Hossain et al (2021) study the nexus between future stock prices and the number of tweets and the findings support the positive effect on variables. Therefore, the results state the hoarding aversion effect.…”

Section: Affect Infusion Modementioning

confidence: 55%

Do Twitter sentiments really effective on energy stocks? Evidence from the intercompany dependency

Yilmaz

Ozpolat

Destek

2022

Environ Sci Pollut Res

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The study aims to examine the effects of social media activities on stock prices of the energy sector. In this respect, the sample covers the monthly period from 2015m6 to 2020m5 has been observed. Energy stocks as S&P 500 index (SP), stock market volatility index (VIX), trade-weighted USD index (USD), and Brent oil prices (OIL) have been used as independent variables. Accordingly, three different models have been created to analyze the link between returns, volatility and trading volume and Twitter sentiments by using Augmented Mean Group. As a result, we found that Twitter sentiment values have no significant impact on the returns and volatility of the companies. Tweets, on the other hand, appear to have a favorable impact on company trading volume values.

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Section: Affect Infusion Modementioning

confidence: 55%

Do Twitter sentiments really effective on energy stocks? Evidence from the intercompany dependency

Yilmaz

Ozpolat

Destek

2022

Environ Sci Pollut Res

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“…Based on the perspective of implied volatility, they found that the restatement of financial reports, earnings management and internal control defects would increase the occurrence of stock price crash risks. Other scholars have conducted research from the perspective of external supervision, including tax regulation (Kim et al, 2011;Chen et al, 2022), media reports (An et al, 2020;Hossain et al, 2022), institutional investors (Xiang et al, 2020), and investor sentiment (Fu et al, 2021).…”

Section: Hypothesismentioning

confidence: 99%

Environmental information disclosure and stock price crash risk: Evidence from China

Chen²,

Qiu³

et al. 2023

Front. Environ. Sci.

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Environmental performances have gained great prominence for firms in recent years. This paper empirically tests the relationship between environmental information disclosure and the risk of stock price crashes based on a sample of Chinese A-share listed firms from 2013–2018. The results show that environmental information disclosure has a significant negative correlation with stock price crash risk, with mechanism analysis showing that media coverage plays an intermediary role between them. Further analysis finds that: first, the inhibitory effect of environmental information disclosure on stock price crashes is more significant in companies with a lower proportion of independent directors, which reflects the supervision effect of environmental information disclosure. Second, the role of environmental information disclosure has a greater negative impact on the risk of stock price crashes in industries with low competition, indicating that environmental information disclosure is not a tool for enterprises to compete for resources. Third, the profit motivation of institutional investors restrains the negative impact of environmental information disclosure on price collapse risk. Forth, the level of government environmental governance is an important support for enterprise environmental information disclosure.

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“…16 Nevertheless, in recent years increasing popularity is reaching a more paternalistic approach to investor protection which is more related to intervention for the person's "own good" and less oriented on reducing information asymmetries. 17 Paternalism is to assist those whose "judgment is so impaired due to immaturity, ignorance, incompetence, or the like that they do not know or appreciate that they are about to harm their interests". 18 Behavioral finance research shows that investment decisions are impaired by many systematic biases and cognitive errors.…”

Section: Investor Protectionmentioning

confidence: 99%

How Does the Law Protect the Crowd? About Crowd Investor Protection Mechanisms Introduced by the Eu Regulation 2020/1503

Brejdak

2023

iele

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Crowdfunding services provide an unconstrained pool of investors who all receive investment proposals at the same time, and they mainly entail the raising of capital from individual people, including those who are not high-net-worth individuals. Crowdfunding allows a company to raise capital without conducting a formal public offering procedure. Equity crowdfunding, as a relatively new form of raising capital for business ventures, raises many doubts in the field of corporate governance. The fundamental advantage of crowdfunding from an entrepreneur's perspective is that the founder of the company does not have to cede as many rights to crowd investors as he or she would if the investor were a venture capital or private equity fund. As a result, a crowd investor is a passive investor by definition. To unify rules among Member States and create mechanisms of protection for this completely new type of investor, the Regulation (EU) 2020/1503 was enacted. This paper aims to analyze the main investor protection mechanisms included inRegulation 2020/1503 and compare them with MIFID II provisions, which constitute the main protection mechanisms for traditional retail investors. This analysis enables an answer to whether crowd investors are offered a higher level of protection than traditional retail investors. The author of this paper claims that protection mechanisms introduced by Regulation 2020/1503 regarding non-sophisticated investors are an example of increasing paternalism in the financial markets. However, the characteristic of the equity crowdfunding market justifies a higher-level paternalism and intervention in order to protect non-sophisticated investors.

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Wisdom of the crowd and stock price crash risk: evidence from social media

Cited by 16 publications

References 44 publications

Do Twitter sentiments really effective on energy stocks? Evidence from the intercompany dependency

Do Twitter sentiments really effective on energy stocks? Evidence from the intercompany dependency

Environmental information disclosure and stock price crash risk: Evidence from China

How Does the Law Protect the Crowd? About Crowd Investor Protection Mechanisms Introduced by the Eu Regulation 2020/1503

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