Aug 31, 2006

Getting investment advice from spammers

Apparently, quite a few people do.
A recent study by Rainer Böhme and Thorsten Holz*, two computer scientists from Germany's Technical University of Dresden and Mannheim University, respectively, shows the practice is widespread and does have an impact, at least in the short run, on share trading and prices.

The study tracks shares in America's S&P 500, the NASDAQ Composite, the Russell Microcap Index and Pink Sheets, particularly thinly traded ones that tend to be promoted by spammers. Between November 2004 and February 2006, the researchers found 391 different shares that were targeted. The 111 with sufficient historical data tended to fluctuate 13% more after the e-mails went out than other shares on the indices. In the short-term, they said prices tended to rise after a spamming campaign. They did not study long-term effects.

Via CJR Daily.

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