Information Activism and Retail Investor Behavior in Divergent Market Conditions

Abstract

Information activism is intentional action stemming from formal and informal information sources offering supplemental communication intended to form and/or sway investor behavior. This study extends empirical research by identifying the particular circumstances; i.e., during economic uncertainty and when information asymmetry is high, in which investor behavior is associated with information activism. The differential effects of two primary sources of information activism, CNBC’s Mad Money and the financial blog, www.SeekingAlpha.com, are examined. Findings denote that abnormal returns are associated with information activism during bearish market conditions and for buy recommendations when information asymmetry is high.