Expert Network Calls
Fisher College of Business Working Paper No. 2022-03-013
Charles A Dice Center Working Paper No. 2022-13
48 Pages Posted: 28 Nov 2022 Last revised: 15 May 2023
Date Written: May 15, 2023
Abstract
Expert networks provide investors with in-depth discussions with subject matter experts. Expert call demand is higher for younger, technology-oriented firms and those with greater intangible assets, consistent with demand for information on hard-to-value firms. Expert calls are more (less) likely to emphasize technology and operational (financial) topics relative to earnings calls. We find that expert call volume is associated with hedge fund position changes and greater price efficiency. The relation is asymmetric, with call volume preceding hedge fund sales, greater short interest, and negative firm performance. The evidence suggests that expert networks help investors discern complicated bad news.
Keywords: Expert Networks, Price Efficiency, Hedge Funds, Informed Trading
JEL Classification: G11, G12, G14
Suggested Citation: Suggested Citation