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Are Internet message boards used to facilitate stock price manipulation? Evidence from an emerging market, Thailand

Nattapong Laksomya, John G. Powell, Suparatana Tanthanongsakkun and Sirimon Treepongkaruna

Accounting and Finance, 2018, vol. 58, issue S1, 275-309

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.

Date: 2018
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