Abstract

This study examines the impact of stock message board postings on stock price crash risk. With the development of the internet in the 21st century, individual investors can acquire and analyze various financial and non－financial information through various online channels. In particular, investors share their opinions and engage in discussions through online portal sites’ stock message boards. Previous research on stock message boards examines whether the posts on these boards are merely gossip or have an impact on the stock market. This study focuses on stock price crash risk and explores whether discussions in online stock message boards decrease or increase this risk. Given that anonymous－based stock message boards often contain meaningless or irrelevant posts, this study considers posts containing accounting information as informative. As such, we examine whether the proportion of accounting information posts has a discriminatory effect on stock price crash risk. For empirical analysis, a Python－based crawler was developed to collect all posts in stock message boards from 2019 to 2021 for companies listed on the domestic stock and KOSDAQ markets. The results of the analysis show that as the proportion of posts containing accounting information increases, stock price crash risk also increases. This suggests that posts based on accounting information in stock message boards do not suppress managers from hiding adverse information, and instead amplify investor reactions in the capital market. We further find that the positive relationship between the proportion of accounting information posts in stock message boards and stock price crash risk is driven by companies with poor accounting performance. This supports the idea that accounting information posts exacerbate negative market reactions and contribute to stock price crash risk for companies with poor accounting performance. This study makes an academic contribution by expanding the research on the impact of online stock message boards on the capital market. Additionally, it has practical implications by providing evidence that the proportion of accounting information posts predicts stock price crash risk.

Keywords

• Stock message boards
• accounting information
• stock price crash risk
• textual analysis

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