Stock Spams: Another Kind Of Stock Prices Manipulation

Taoufik Bouraoui, Mohamed Mehanaoui and Bouchaib Bahli
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Taoufik Bouraoui: ESC Rennes School of Business - ESC [Rennes] - ESC Rennes School of Business
Mohamed Mehanaoui: Sup de Co Amiens
Bouchaib Bahli: ESC Rennes School of Business - ESC [Rennes] - ESC Rennes School of Business

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Abstract: This research investigates the market reaction to an information-based manipulation called stock spams. The impact is focused on the liquidity variable which is measured by Amivest ratio. Using the event study methodology on a sample of penny stocks for the period February 2006 through October 2008, our findings suggest positive and significant abnormal liquidities for stocks targeted by manipulators during the event window. Robustness checks were performed using a non-parametric test. These results support the thesis that this kind of manipulation is a very flourishing business that manipulators exploit by simply purchasing stocks at low prices and selling them at higher prices.

Date: 2012-12-28
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Published in Journal of Applied Business Research, 2012, 29 (1), pp.79. ⟨10.19030/jabr.v29i1.7557⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04013218

DOI: 10.19030/jabr.v29i1.7557

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