Grant detail

GAUK 728217 Need for tweet: Can Twitter explain and predict two key IPO puzzles? Evidence from Great Britain - application (November 2016)

Principal investigator: Mgr. Lenka Dvořáková Švejdová
Description: Based on recent data presented on BrandWatch website, the total number of internet users worldwide has reached 3.5 billion in 2016, while key role is played by social media - the latest estimates claim there are 2.3 billion active social media users. Among researchers and investors one of the most followed social media is Twitter. With its1.3 billions accounts generating 500 million tweets a day, it offers innovative source of the “collective mind“ for researchers to study public sentiment and behavior of other complex systems, that it both reflects and influences. Our aim is to research, how number of tweets and their sentiment contributes to explaining and predicting the two key puzzles around IPOs - high initial returns and underperformance in the long term. Since IPOs have no trading history and information on the company or guidance is rather limited, any presented information through social media with immediate reach worldwide might have significant effect on investors' decision making process and on price performance of specific offering.

As vast majority of research relates to U.S. market and stocks with trading history, we set our focus to european IPOs, represented by offerings listed in London Stock Exchange.
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End date: 2019




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