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Cryptic excitement: unveiling market reactions to Facebook's Metaverse and potential manipulation in China's stock market

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  • Huang, Lingyu
  • Mao, Ruoyu

Abstract

This study examines the impact of Facebook's rebranding on the Metaverse's renewed interest, revealing potential market manipulation concerns in China. Analyzing Chinese publicly listed firms entering the Metaverse, the research notes a surge in initial disclosures, aligned with Facebook's rebranding and increased investor sentiment. Investors' exaggerated reactions to Metaverse-related announcements are observed, alongside insiders' timed transactions leading to substantial profits during the Metaverse frenzy. The results underscore Chinese regulators' worries, highlighting the susceptibility of investors to companies' initial Metaverse disclosures.

Suggested Citation

  • Huang, Lingyu & Mao, Ruoyu, 2024. "Cryptic excitement: unveiling market reactions to Facebook's Metaverse and potential manipulation in China's stock market," Finance Research Letters, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:finlet:v:60:y:2024:i:c:s1544612323012588
    DOI: 10.1016/j.frl.2023.104886
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    More about this item

    Keywords

    Metaverse; Corporate disclosures; Market reaction; Insider trading;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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