Financial Media Sensationalism – Rumor Has It….
Published on Apr 11, 2016
Organized by Columbia Business School faculty Paul Glasserman, Harry Mamaysky, and Paul Tetlock, the News and Finance: How the Media Affects Markets conference brought together journalists, academics, and finance leaders to exchange perspectives on the dissemination of news and its influence on markets.
Denis Sosyura, Assistant Professor of Finance, University of Michigan Ross School of Business, presented “Rumor Has It: Sensationalism in Financial Media.”
Financial Media Sensationalism
8:59actual we’re looking at two thousand articles which we have five hundred sort
10:10of unique Articles remaining ones are reproductions and about a hundred media
10:18sources because truth this article originally like to show that the
10:25majority of rumors never come true so the approximately seven seventy percent
10:31are gone they’re not followed by an offer that leader so what
10:42characteristics that predict whether the question of what r should be newsworthy
10:53party instead receive me here so all the merger negotiations merger could be
11:02cover our public companies
11:07popular brands of Google’s and Apple’s of the world as opposed to let see
11:12Cummins engines of et interest of the lesser-known companies in the ones who
11:16are either local or beso give local audiences aspect of the clientele
11:22driving also advertising expenditures are MPs is sort of technologies for high
11:33so we want to hear that need it is more likely to publish stories about Wingstop
11:40recognizable brands advertising for the ones that your audience is more like it
11:47to be familiar with in this way to generate greater is He factor of
11:54articles 2002 she did call I have the the return of your article published on
12:08the price of the deal the average D 34 percent on the day of the world to
12:19really recognize and which ones are more likely to be accurate so
12:27around three percent but all the general you seem to suggest that media has a
12:38very rapid in major impact on stock is an important part of Paradise Point
12:46you’re so when you see that there is a white in in returns on Dec 03 subsequent
12:54return both subsequent personal on average with the other troopergate
12:58consistent with our readers that the full coverage at the very beginning of
13:02today’s conference there’s a lot of opportunity and investor attention to
13:16the hard question to answer what we tried to do here is really identify the
13:22identity of traders that so this is we went to a consulting firm that received
13:31execution of trained for its constitutional the cover of mutual funds
13:39hedge funds and those institutions to report all of your trips so we’re able
13:46to capture the approximately 11% of total total amount of trigger proxy
13:51below two percent of total of 32 because it is a very large consultants have been
13:59net sellers
14:00what happens is the the Y still water felt so this is the difference between
14:06the number of Stockton off her shirt off the number of shares of the rootstock
14:12next on the rumor is likely buyer will be other side of the tree is likely to
14:23be taking retail investors which is consistent with this notion that are
14:28written for the average reader of the newspapers retail industrial ones that
14:35are trading of this news we’re pretty sure so what are the characteristics
14:46that predict whether a rumor will be realized using journalists at the next
14:59table at the characteristics of the characteristics we included in the
15:05previous regression me more likely the rumor actress in other words the rumors
