Expert Network Calls

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

Cao, Sean S. and Green, T. Clifton and Lei, Lijun and Zhang, Shaojun, Expert Network Calls (May 15, 2023). Fisher College of Business Working Paper No. 2022-03-013, Charles A Dice Center Working Paper No. 2022-13, Available at SSRN: https://ssrn.com/abstract=4280865 or http://dx.doi.org/10.2139/ssrn.4280865