Media Attention and Event-Based Grouping of Stocks: An Examination of Stocks Hyped by Media Outlets as Benefiting from the Olympics

Patricia Dechow (), Alastair Lawrence (), Mei Luo () and Ventsislav Stamenov ()
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Patricia Dechow: Marshall School of Business, Leventhal School of Accounting, University of Southern California, Los Angeles, California 90089
Alastair Lawrence: London Business School, The Regent’s Park, London NW1 4SA, United Kingdom
Mei Luo: Tsinghua University School of Economics and Management, Haidian District, Beijing 100084, China
Ventsislav Stamenov: Sorrell College of Business, Troy University, Troy, Alabama 36081

Management Science, 2024, vol. 70, issue 8, 5157-5186

Abstract: We examine five summer Olympics and identify stocks that media outlets hype as benefiting from the Olympics (Olympic stocks). There is a seven-year period from the time that a country first learns it has won the Olympic bid to the start of the games (Olympic time period). We predict that the excitement of the Olympics along with the greater media attention impacts the valuation and risk of Olympic stocks. Consistent with this prediction, we show that Olympic stocks earn higher returns than their matched counterparts and comove more strongly with each other over the Olympic time period. Olympic stocks also exhibit increases in trading volume and stock volatility on days when media outlets have stories linking the firm to the Olympic Games. However, we find no evidence that the Olympic Games translate into stronger fundamentals for Olympic firms or stronger fundamental comovements. These findings suggest that investors are not purchasing the stocks based on an analysis of fundamentals, but are purchasing them based on their Olympic attribute. To confirm that event-based groupings occur in other settings, we show that comovement increases for stocks classified by the media as “stay-at-home” stocks at the start of the COVID-19 pandemic.

Keywords: sports events; media; Olympics; Olympic stocks; retail investors; valuation; fundamentals; comovement; event-based groupings; adjusted R 2; synchronicity; investor sentiment; investor recognition; stay-at-home (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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