Asberry 22 Holdings Inc (ASHI)

[bernardsamuel]

FWIW, I Googled "influence of stock message boards on prices," and below is the title of one of the journal articles I found. I'm not really sure if the conclusion of the article, which can be found at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1972098
favors one side more than the other in the debate going on here, but I thought that the topic was worth taking a few minutes to research so that the good people here might have a better chance to debate the issue constructively.

Do Internet Stock Message Boards Influence Trading? Evidence from Heavily Discussed Stocks with No Fundamental News
The authors are three professors from the University of Texas at Arlington, and the article appeared late in 2011 in the Journal of Business Finance and Accounting. Below is the abstract of the article, and I've put in bold print the main conclusion of the article which is that what's put on message boards temporarily affects stock prices.

Abstract:

This study extends the literature on the information content of stock message boards. To better understand the effect of online postings on trading activities and reduce the error due to stocks with small message board followings, we examine stocks with no fundamental news and high message posting activity. Such stocks tend to be of small firms with weak financials. For those stocks, we find a two-day pump followed by a two-day dump manipulation pattern among online traders, which suggests that an online stock message board can be used as a herding device to temporarily drive up stock prices. We also find that online traders’ credit-weighted sentiment index, but not the number of postings, is positively associated with contemporaneous return and negatively predicts the return next day and two days later. Also, absolute sentiment is negatively related with contemporaneous and next day's intraday volatility and positively related with the proportion of volume in small-sized trades. We conclude that message board sentiment is an important predictor of trading-related activities.

I'm sorry that this is such a long post. I just think it's worth the effort sometimes to bring facts to the table so that debates on really good topics have a better chance to stay on topic. Good night to all...