Investment decisions: Influence of an Internet stock message board.

The Internet provides many sources of financial information that investors can use to help with investment decisions and in interpreting companies' accounting information. One source of information is Internet stock message boards such as those at Yahoo! Finance. This source allows for anonymous postings and information exchange. Despite the possibility of the information being incorrect many individuals visit these message boards. The purpose of this study is to investigate Internet stock message boards and address the primary question: From an individual investor perspective, do message boards, which contain accounting information, influence investment decisions? The question is addressed using psychology rumor literature and attitude theories. Message board postings are a type of rumor, since not all the information is verified and is usually intended to persuade a belief or influence a decision. Further, the messages may influence an investor by causing a change in attitude about the investment. Using an experiment, message board influence on an investment decision and attitude was tested. The results indicated that individuals that received negative message board postings did have a significantly higher change in investment amount as compared to a control group that did not receive any message postings. The positive message board group and the control group were not significantly different in their amount of investment change. The results of the study also show that message board postings influenced attitude, those that received negative (positive) postings had a negative (positive) attitude about the investment. It was further found that those with a negative (positive) attitude decreased (increased) their investment. Finally, contrary to expectations, investment experience did not lead to an individual being less influenced by message board postings. This study contributes to the accounting literature by investigating an additional source of Internet financial reporting that may or may not contain correct information. The SEC is concerned over the manipulative opportunities that are available within these message boards and many investors are exploring these new sources of information instead of relying on traditional accounting information. This study finds that negative postings have an influence on investment decision and possibly should be investigated as manipulative techniques.

Grantor dc:publisher

University of North Texas

Year dc:date

2007

Author dc:creator

• Pleis, Letitia Meier

Contributors dc:contributor

• Mayper, Alan G., 1952-
• Pavur, Robert J.
• Wilner, Neil A.
• Molina, David

• rumor
• message boards
• attitudes
• accounting
• Investments -- Information resources.
• Investments -- Decision making.
• Investments -- Electronic discussion groups.

Statement dc:rights

• Public
• Copyright
• Pleis, Letitia Meier
• Copyright is held by the author, unless otherwise noted. All rights reserved.

Language dc:language

English

Identifier

oclc: 230293700
https://digital.library.unt.edu/ark:/67531/metadc5130/
ark: ark:/67531/metadc5130

OAI identifier oai:identifier

info:ark/67531/metadc5130