The posts on these message boards, do they influence stock prices?
The boards which are surveyed are Yahoo(more employees), RagingBull(more daytraders or inexperienced investors if you will) and SI(more institutional investors), which are considered the most active boards on all stocks. Most other boards such as AOL(more computer illiterates), were not public except for their subscribers, were not included. Most online brokerage message boards had no efforts to keep the board active for long.
So, what happens with rumors on the boards? Nothing at all. If you understand statistics, the viewers of the message boards have to have money or stocks to be influenced. It depends on whether they are in love with the stock? Which does not need influence. It depends on greed and fear, which is only influenced by the market makers. It depends on the season, such as tax loss, or tax refund and/or bonus time.
Most of the viewers are not experienced investors. They learn on the message boards.
The other question is of course do we want to hawk a stock so it becomes overbought? It happened to AMES, ANTC, MSEL, etc. It happened to SEMI, which went down to $2 early this year. Now SEMI is neither overbought for long, nor oversold for long. It will be rewarded when the company make progress beyond what is the run of the mill performance. We are all waiting patiently. |
