Non-Fruitful Token? Market Reactions to NFT-Related Disclosures

Smadar Siev

Chapter 11 in Behavioral Finance:Beyond the Basics, 2024, pp 233-273 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This study analyzes market reactions to firms’ “NFT” or “Non-Fungible Token” disclosures filed with the SEC. The analysis distinguishes “Clear” disclosures, indicating actual NFT engagement, from “Vague” ones, referring to vague future intentions. Both types exhibit similar non-significant CAAR behavior upon announcement, followed by a significant decline. Positive cash flow firms experience initial positive CAAR, reversing by day 4. Segmenting by traits shows varied CAAR patterns, but overall, the study suggests skepticism toward NFTs. Firms in or entering this space face consistent negative CAAR over 30 days post-publication, indicating market mistrust.

Keywords: Market Efficiency; Cross-Sectional Anomalies; Arbitrage Trading Activity; Exploiting Mispricing Dividends; Stock Repurchase; Annuity; Financial Decisions; Lump Sum. Retirement Savings; Behavioral Factors; Disruptive Innovation; Market Transition; Investments; Analyst Recommendations; Coverage Initiation; Stock Market Reaction; Artificial Intelligence; Professional Investors (search for similar items in EconPapers)
JEL-codes: G4 (search for similar items in EconPapers)
Date: 2024
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