Abstract
Master Thesis in Business Administration. School of Business and Economics at Linnaeus University, Växjö, 2016.
Authors
Alexander Palm & Adam Sjögren
Supervisor:
Christopher Von Koch & Katarina Eriksson
Examiner:
Sven-Olof Yrjö Collin
Title:
“Stock recommendations in a new era – Podcasts in financial markets.”
Background & problem:
Banks and other financial institutes deliver traditionally stock recommendations. Bias from these sources has been observed which can be of disadvantage for individual investors. Podcasts is a relatively new kind of media that can supply the market with stock recommendations. Since podcasts is a new media, there is little research regarding its role on financial markets and its potential to offer financial advice.
Purpose:
The purpose is to extend previous research regarding podcasts and it’s role on market efficiency and market function.
Method:
We apply a deductive benchmark and a quantitative approach. A traditional event study with two different time-spans is conducted to analyse stock recommendation and the effect on stock prices.
Conclusion:
Results indicate lack of support for IH with stock recommendations from podcasts, which in turn is support for EMH. However, PPH does have support, which indicate deficiency in EMH. Thus, we provide evidence that the Swedish stock market is not fully efficient and doesn’t posses semi-strong form. No information leakage could be observed, something that differs from previous research on stock recommendations. We could provide evidence of a temporary and positive effect regarding the market function for Small Cap. The observed increase in trading volume proves overconfidence on the Swedish stock market, something that has previously been shown. No knowledge dispersion exists between listeners of podcasts, something that differs from theory and previous research.