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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26477
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| Title: | The Valuation and Market Rationality of Internet Stock Prices |
| Authors: | Ofek, Eli
Richardson, Matthew |
| Issue Date: | 2002 |
| Series/Report no.: | FIN-02-033 |
| Abstract: | This paper provides an analysis of some existing as well as new evidence
of the relation between market prices and fundamentals in the internet
sector over the period January 1998 to February 2000. Appealing to
results across a broad class of outcomes, we demonstrate a strong,
circumstantial case against market rationality In particular, we
investigate (i) the level of internet stock prices given their
underlying fundamentals, (ii) responses of stock prices to
information-based events, and (iii) the volatility of internet prices.
We review several potential explanations of these phenomena, including
one based on heterogenous beliefs across investors who are subject to
short sales constraints. We provide a discussion of the empirical
evidence supporting this latter explanation. |
| URI: | http://hdl.handle.net/2451/26477 |
| Appears in Collections: | Finance Working Papers
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