Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241838 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] China Journal of Accounting Research [ISSN:] 1755-3091 [Volume:] 14 [Issue:] 3 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2021 [Pages:] 231-255
Publisher: 
Elsevier, Amsterdam
Abstract: 
In this study, we use initial public offerings (IPOs) in China to investigate how online stock forums influence information asymmetry and IPO valuation. The empirical analysis isolates the underpricing and overvaluation components of initial returns. The number of forum comments, postings, and readings are positively associated with initial returns and the degree of underpricing, implying that forums create noise that exacerbates information asymmetry during IPOs. This effect is amplified by the quiet period regulation, which drives investors to rely on online discussion forums to obtain information. Through sentiment analyses of forum posts and media coverage, we find that the negative effect of online forums is more prominent when bad news prevails. We clarify the role of online stock forums in IPO pricing and information asymmetry by separating underpricing from overvaluation in initial returns.
Subjects: 
Online forum
IPO valuation
Underpricing
Overpricing
Quiet period
Online posting
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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