Bad News: Stock Spam Works
Purdue University finance professor Laura Frieder and Jonathan Zittrain, a professor at Oxford University and a founder and affiliate of the Berkman Center for Internet & Society, released a study last fall indicating those spam e-mails with which you might be all too familiar actually boosted some stock prices.
“Based on a large sample of touted stocks listed on the Pink Sheets quotation system, we find that stocks experience a significantly positive return on days prior to heavy touting via spam. Volume of trading responds positively and significantly to heavy touting. For a stock that is touted at some point during our sample period, the probability of it being the most actively traded stock in our sample jumps from 4% on a day when there is no touting activity to 70% on a day when there is touting activity. Returns in the days following touting are significantly negative. “
The abstract goes on to say the spammers might possibly be buying the stocks, spamming people to increase the price, then trying to sell while the price is high. The success of that behavior could mean this kind of spam will continue to be quite popular.
*holds out hands like scales*
Hhhmmm … making money on the stock market vs. spam.
Please don’t try this experiment at home based on the spam you receive.
Remember: I am not a financial adviser. The information in this blog post is not financial advice.
March 23rd, 2007 at 9:06 am
I blogged about this as well. I was becoming inundated with so many lousy spam e-mail that I wrote a quick guide to beating the stock spams for good.
September 22nd, 2007 at 5:53 am
i created my blog on 2007 april. i’ve got 2.000 spam e-mail! i really hate them