{"title":"Can managers successfully deceive investors? Media attention and market manipulation during the Panama scandal","authors":"Miguel Ángel Ortiz-Serrano, Germán Forero-Laverde","doi":"10.1093/ereh/heae009","DOIUrl":null,"url":null,"abstract":"This paper explores how the Panama Company stock price incorporated fake positive news planted by company managers in French newspapers during the spring of 1888 to bait investors into an upcoming securities issue. The results show that news about the Panama Company only had firm-specific effects, making the firm’s main stock more volatile while keeping constant expected returns. This suggests that investors considered the new debt issue a risky operation. Finally, we find a non-contemporaneous positive effect of future news on present stock returns, suggesting an unlawful exploitation of asymmetric information by investors privy to the publication of fake news.","PeriodicalId":51703,"journal":{"name":"European Review of Economic History","volume":null,"pages":null},"PeriodicalIF":1.2000,"publicationDate":"2024-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"European Review of Economic History","FirstCategoryId":"98","ListUrlMain":"https://doi.org/10.1093/ereh/heae009","RegionNum":1,"RegionCategory":"历史学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper explores how the Panama Company stock price incorporated fake positive news planted by company managers in French newspapers during the spring of 1888 to bait investors into an upcoming securities issue. The results show that news about the Panama Company only had firm-specific effects, making the firm’s main stock more volatile while keeping constant expected returns. This suggests that investors considered the new debt issue a risky operation. Finally, we find a non-contemporaneous positive effect of future news on present stock returns, suggesting an unlawful exploitation of asymmetric information by investors privy to the publication of fake news.
期刊介绍：
European Review of Economic History has established itself as a major outlet for high-quality research in economic history, which is accessible to readers from a variety of different backgrounds. The Review publishes articles on a wide range of topics in European, comparative and world economic history. Contributions shed new light on existing debates, raise new or previously neglected topics and provide fresh perspectives from comparative research. The Review includes full-length articles, shorter articles, notes and comments, debates, survey articles, and review articles. It also publishes notes and announcements from the European Historical Economics Society.
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