Capturing Investor Attention – Do Pre-IPO Google Searches Predict Stock Performance? Evidence from Europe

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dc.contributorAalto Universityen
dc.contributorAalto-yliopistofi
dc.contributor.advisorLof, Matthijs
dc.contributor.authorTorikka, Valtteri
dc.contributor.departmentRahoituksen laitosfi
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.date.accessioned2017-08-17T08:18:29Z
dc.date.available2017-08-17T08:18:29Z
dc.date.issued2016
dc.description.abstractThe amount of investor attention has been found to affect stock returns. Recently, a novel and unique attention measure – the volume of Google searches – has been found to predict IPO returns in the US market (Da et al., 2011). This study brings insight on the same issue and confirms that similar dynamics prevail in the European markets. Using search volume indices from Google Trends as the main explanatory variable, I study a sample of 254 IPOs from the beginning of 2004 to the late 2015 by various controlled cross-sectional regressions and robustness checks. I find that search volumes can predict IPOs’ first-day returns significantly and show signs of predicting long-term returns in continental European markets. The results of this study are mostly in line with attention-induced price pressure hypothesis by Barber and Odean (2008) that suggests that stocks that gather an unusually high amount of attention experience a positive short-term price pressure accompanied by long-term price reversal.en
dc.format.extent28
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/27649
dc.identifier.urnURN:NBN:fi:aalto-201708176553
dc.language.isoenen
dc.programmeRahoitusfi
dc.subject.keywordinvestor attentionen
dc.subject.keywordGoogle trendsen
dc.subject.keywordinternet search volumeen
dc.subject.keywordmarket efficiencyen
dc.subject.keywordEuropeen
dc.subject.keywordIPOsen
dc.titleCapturing Investor Attention – Do Pre-IPO Google Searches Predict Stock Performance? Evidence from Europeen
dc.typeG1 Kandidaatintyöfi
dc.type.ontasotBachelor's thesisen
dc.type.ontasotKandidaatintyöfi
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