Expert Network Calls
Fisher College of Business Working Paper No. 2022-03-013
Charles A Dice Center Working Paper No. 2022-13
66 Pages Posted: 28 Nov 2022 Last revised: 25 Mar 2025
Date Written: May 15, 2023
Abstract
Expert networks offer investors in-depth discussions with subject matter experts. Call volume is higher for hard-to-value firms, such as young, technology-oriented, and high intangible asset firms. Calls emphasize non-financial news, with topic distribution predicting future related news coverage in the following months. We find that expert call tone predicts abnormal future stock returns, stock sentiment, and earnings surprises, especially for negative calls and when tone diverges from prevailing market sentiment. Expert call activity also predicts informed trading and improved price efficiency. Our findings highlight expert networks as a valuable alternative information source, helping investors identify and interpret value-related firm information.
Keywords: JEL: G11, G12, G14 Expert Networks, Price Efficiency, Hedge Funds
JEL Classification: G11, G12, G14
Suggested Citation: Suggested Citation