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

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  • Nattapong Laksomya
  • John G. Powell
  • Suparatana Tanthanongsakkun
  • Sirimon Treepongkaruna

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.

Suggested Citation

  • Nattapong Laksomya & John G. Powell & Suparatana Tanthanongsakkun & Sirimon Treepongkaruna, 2018. "Are Internet message boards used to facilitate stock price manipulation? Evidence from an emerging market, Thailand," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 58(S1), pages 275-309, November.
    • Handle: RePEc:bla:acctfi:v:58:y:2018:i:s1:p:275-309
    DOI: 10.1111/acfi.12360
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    References listed on IDEAS

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    Cited by:

    1. Chaiyuth Padungsaksawasdi & Sirimon Treepongkaruna & Robert Brooks, 2019. "Investor Attention and Stock Market Activities: New Evidence from Panel Data," IJFS, MDPI, vol. 7(2), pages 1-19, June.
    2. Nerantzidis, Michail & Tampakoudis, Ioannis & She, Chaoyuan, 2024. "Social media in accounting research: A review and future research agenda," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 54(C).
    3. Shaen Corbet & Yang (Greg) Hou & Yang Hu & Les Oxley, 2022. "We Reddit in a Forum: The Influence of Message Boards on Firm Stability," Review of Corporate Finance, now publishers, vol. 2(1), pages 151-190, March.
    4. Hilal Ok Ergün & Abdullah Yalaman & Viktor Manahov & Hanxiong Zhang, 2021. "Stock market manipulation in an emerging market of Turkey: how do market participants select stocks for manipulation?," Applied Economics Letters, Taylor & Francis Journals, vol. 28(5), pages 354-358, March.

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