In and Out Scream and Shout: An Internet Conversation about Stock Price Manipulation

The Internet plays an important role in the dissemination of information about exchange traded stocks. This information can come from a variety of sources including disclosures provided through an official company web site or the “rumors” and “tips” frequently posted on any one of the many Internet investment forums located around the world. The rapid development and acceptance of Internet technology presents many difficulties for regulators who may recognize the substantial benefits offered by the technology, but must balance this against the potential for unscrupulous individuals to manipulate others. This paper analyzes a series of posts to an Australian financial forum about a small and thinly traded company listed on the Australian Stock Exchange. The analysis provides insights into community views on the substance and ethics of stock price manipulation, and the role of Internet forums.