Anonymous Equity Research

Crowdsourced financial information platforms often allow content contributors to publish equity research anonymously. This study examines whether investors value or discount information in anonymous equity research. In the short window around research releases, we find that investors' stock price reaction to anonymous research is muted in comparison to nonanonymous research. Consistent with credibility concerns influencing investor response, we document that this discount to anonymous research dissipates as the monitoring of content contributors intensifies and as authors develop a reputation for high-quality reporting. In addition, we perform a content analysis on the research reports and find that the muted market reaction to anonymous equity research is robust to controlling for textual attributes of information content, further supporting our inference that investors' are concerned about the credibility of anonymous equity research.

Automated summary

During the short window around research releases, investors show muted stock price reactions to anonymous equity research compared to nonanonymous research. The discount to anonymous research dissipates as content contributors are monitored more closely and authors develop a reputation for high-quality reporting, indicating that investors are concerned about the credibility of anonymous equity research.