Are Internet message boards used to facilitate stock price manipulation? Evidence from an emerging market, Thailand. (30th March 2018)

• Record Type: Journal Article
• Authors: Laksomya, Nattapong; Powell, John G.; Tanthanongsakkun, Suparatana; Treepongkaruna, Sirimon
• Is Part Of: Accounting and finance. Volume 58(2018)Supplement 1
• Page Start: 275
• Page End: 309
• Publication Date: 2018-03-30
• Subjects: Internet message board -- Pump and dump -- Share price manipulation -- Short and longer run event study -- Short selling; Accounting -- Periodicals; Finance -- Periodicals; 657.05
• DOI: 10.1111/acfi.12360
• Languages: English
• ISSNs: 0810-5391

Abstract

Abstract: The impact of messages posted on the top three financial discussion boards in Thailand is investigated using an event study approach. Heightened message board posting activity for small firms is associated with a strong pre‐event share price run‐up over many days and a partial post‐event return reversal, consistent with manipulative activity whereby traders sometimes 'talk up' small‐firm prospects on message boards and then dump them. Close to 90 percent of the price falls associated with bad discussion board news get reversed within 75 days, consistent with short sellers utilising heightened self‐serving message board activity when targeting companies for short selling.