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Crowd Analysts vs. Institutional Analysts – A Comparative Study on Content and Opinion

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Innovation Through Information Systems (WI 2021)

Part of the book series: Lecture Notes in Information Systems and Organisation ((LNISO,volume 47))

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Abstract

The ongoing digital transformation shapes the world of information discovery and dissemination for investment decisions. Social investment platforms offer the possibility for non-professionals to publish financial analyst reports on company development and earnings forecast and give investment recommendations similar to those provided by traditional sell-side analysts. This phenomenon of “crowd analyst reports” has been found to provide an adequate alternative for non-professional investors. In this study, we examine the informational value of these crowd analyst reports regarding their timeliness in publishing and their originality as for content and opinion. Our findings suggest that crowd analysts strongly rely on previously published institutional reports. Therefore, crowd analysts do not pose a threat to institutional analysts at this time, however, they provide a more accessible information basis and improve decision-making for individual investors.

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Notes

  1. 1.

    The strong influence of the conference call on the content of the reports is also evident when calculating the average similarity between the reports and the conference call transcript for this period. Pairings between conference calls and crowd reports show a similarity of 0.2706 whereas the pairings between conference calls and institutional reports show similarities of 0.2912. These values are higher than the similarity between crowd and institutional reports.

  2. 2.

    The correlation of the sentiment scores of the paired institutional and crowd reports is calculated after the influence of the sentiment from the conference call is eliminated from both variables. The partial correlation can be implemented by regressing the sentiment scores first from the crowd and second from the institutional reports against the conference call sentiment and then calculating the correlation between the residuals of these two regressions.

  3. 3.

    The results of the sensitivity check are not included into this document but are available upon request.

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Authors and Affiliations

  1. Chair of Electronic Finance and Digital Markets, University of Goettingen, Goettingen, Germany

    Steffen Bankamp, Nicole Neuss & Jan Muntermann

Authors
  1. Steffen Bankamp
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  2. Nicole Neuss
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  3. Jan Muntermann
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Corresponding author

Correspondence to Steffen Bankamp .

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Editors and Affiliations

  1. Faculty of Business Administration and Economics, University of Duisburg-Essen, Essen, Germany

    Frederik Ahlemann

  2. Faculty of Business Administration and Economics, University of Duisburg-Essen, Essen, Germany

    Reinhard Schütte

  3. Department of Computer Science and Applied Cognitive Science, University of Duisburg-Essen, Duisburg, Germany

    Stefan Stieglitz

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Bankamp, S., Neuss, N., Muntermann, J. (2021). Crowd Analysts vs. Institutional Analysts – A Comparative Study on Content and Opinion. In: Ahlemann, F., Schütte, R., Stieglitz, S. (eds) Innovation Through Information Systems. WI 2021. Lecture Notes in Information Systems and Organisation, vol 47. Springer, Cham. https://doi.org/10.1007/978-3-030-86797-3_33

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  • DOI: https://doi.org/10.1007/978-3-030-86797-3_33

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