Abstract
We study the effects of social media on the informativeness of retail trading. Our identification strategy exploits the editorial delay between report submission and publication on Seeking Alpha, a popular crowdsourced investment research platform. We find the ability of retail order imbalances to predict the cross-section of stock returns and cash-flow news increases sharply in the intraday post-publication window relative to the pre-publication window. The findings are robust to controlling for report tone and stronger for reports authored by more capable contributors. The evidence suggests that recent technology-enabled innovations in how individuals share information help retail investors become better informed.
Original language | English |
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Pages (from-to) | 616-641 |
Number of pages | 26 |
Journal | Journal of Financial Economics |
Volume | 145 |
Issue number | 2 |
DOIs | |
State | Published - Aug 2022 |
Bibliographical note
Publisher Copyright:© 2021
Keywords
- Informed trading
- Investment research
- Retail investors
- Seeking alpha
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics
- Strategy and Management