Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 5, 2023 erstellt
Beschreibung:
We investigate whether gambling-motivated retail trading generates mispricing among firms with extreme negative news. Employing a novel accounting-based measure of failure propensity conveyed by the going-concern (GC) audit opinions, we show that gambling-induced trading in GC firms with lottery-like features generate an underperformance of -23% to -42% during the year following financial distress. Retail investors are net-buyers of these stocks both around and following the GC event. Further, using socioeconomic, demographic, and direct trading data, we confirm that retail investors with greater propensity to gamble are more likely to trade financially distressed stocks with lottery features