"New media is playing an important role in the financial world. Rapid growth in stock market message boards, chat rooms, and other electronic means for investors to share market information makes clear the ever-increasing demand for online stock trading. In addition to an increasing number of related sites and apps, growth in the number of investors participating has exploded. The U.S. Securities and Exchange Commission and the Federal Trade Commission are especially interested in tracking the activities on stock market message boards in order to protect market credibility.Stock Message Boards provides empirical data to reveal how online communication not only impacts stock returns, but also volatility, trading volume, and liquidity, as well as a firm's value and reputation. Zhang demonstrates the long-term value of stock market message boards by using simple mathematics and statistics to show readers how to measure message board activities.

This work argues that online message boards are more effective for small capitalization stocks than large capitalization stocks, and more prominent for financially-distressed firms than financially-sound firms"--"This book shows how online chats impact stock trading and helps practitioners, researchers, and policymakers gauge how online stock recommendations will change investors' trading decisions and sentiments, ultimately impacting firms' values. This book presents theoretical models, mathematical derivations, statistical analyses, case studies, graphic demonstrations, and tabulated empirical evidence to show a new source from which investors obtain information especially for their short-term trading and long-term investment decisions. This book reveals that sentiments disclosed by forum posters are generally over-optimistic. Further empirical evidence shows that online talk not only affects stock returns, but also affects volatility, trading volume, liquidity, and even firm's long-term value and reputation. Such online talk effect is more prominent for small capitalization stocks than large capitalization stocks, more prominent for financial distress firms than financial sound firms. In sum, stock message boards provide useful information for trading. It is doable for large institutional investors to take advantage of such information in an aggregate level to create profitable trading strategies, but this is unlikely for small retail investors"--.