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The Impact of Manipulation in Internet Stock Message Boards

Delort, S Jean-Yves and Arunasalam, Bavani and Leung, Henry and Milosavljevic, Maria (2011) The Impact of Manipulation in Internet Stock Message Boards. The International Journal of Banking and Finance, 8 (4). pp. 1-18. ISSN 1617-722

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Internet message boards are often used to spread information in order to manipulate financial markets. Although this hypothesis is supported by many cases reported in the literature and in the media, the real impact of manipulation in online forums on financial markets remains an open question. This paper is on the effect of manipulation in internet stock message boards on financial markets by employing a unique corpus of moderated messages to investigate market manipulation.Internet message board administrators use the process of moderation to restrict market manipulation. We find that manual supervision of stock message boards by moderators does not effectively protect Internet users against manipulation. By focusing on messages that have been moderated as manipulative due to ramping, we show ramping is positively related to market returns, volatility and volume. Stocks with higher turnover, lower price level, lower market capitalization and higher volatility are more common targets of ramping.

Item Type: Article
Uncontrolled Keywords: Ramping, market manipulation, internet stock message boards, event study
Subjects: H Social Sciences > HG Finance
Divisions: School of Economics, Finance & Banking
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 25 Oct 2018 00:39
Last Modified: 25 Oct 2018 00:39

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