Place Your Bets? The Market Consequences of Investment Research on Reddit's Wallstreetbets

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DOI:10.2139/ssrn.3806065
Corpus ID: 233631463

@article{Bradley2021PlaceYB, title={Place Your Bets? The Market Consequences of Investment Research on Reddit's Wallstreetbets}, author={D. Bradley and Jan Hanousek Jr. and Russell Jame and Zicheng Xiao}, journal={Capital Markets: Market Efficiency eJournal}, year={2021}, url={https://api.semanticscholar.org/CorpusID:233631463}}

D. Bradley, Jan Hanousek Jr., Zicheng Xiao
Published in Social Science Research… 15 March 2021
Business, Economics

We examine the market consequences of due diligence (DD) reports on Reddit’s Wallstreetbets (WSB) platform. We find average ‘buy’ recommendations result in two-day announcement returns of 1.1%. Further, the returns drift upwards by 2% over the subsequent month and nearly 5% over the subsequent quarter. Retail trading increases sharply in the intraday window following publication, and retail investors are more likely to be net buyers following reports that earn larger returns. Thus, in sharp…

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