It Hurts (Stock Prices) When Your Team is about to Lose a Soccer Match

Michael Ehrmann and David-Jan Jansen

Review of Finance, 2016, vol. 20, issue 3, 1215-1233

Abstract: The end result of major sporting events has been shown to affect next day stock returns through shifts in investor mood. By studying intraday data during the soccer matches that led to the elimination of France and Italy from the 2010 FIFA World Cup, we test whether mood-related pricing effects already materialize as events unfold. We use data for a cross-listed firm, which allows for a straightforward identification of underpricing. During the matches, the firm’s stock is underpriced by up to 7 basis points in the country that eventually loses. The probability of underpricing increases as elimination becomes more likely.

Date: 2016
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Working Paper: It Hurts (Stock Prices) When Your Team Is About to Lose a Soccer Match (2014)
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