انتقال اطلاعات و مطبوعات: مورد رونق طلای Gawler Craton

This study examines intra-industry information transfer after Helix Resources announced a successful drill result in the Gawler Craton region of South Australia that sparked significant investor interest in mining companies with tenement holdings in the area. This study shows that the price response of competing explorers was determined by press coverage immediately following the discovery of gold, but stocks that received the most press attention in the immediate post-announcement period suffered the greatest long-term underperformance. The research is the first in capital market literature to make use of geographical information systems software technology.

This paper examines the case of a famous gold discovery in South Australia made by Helix Resources. The discovery saw Helix's share price rise from 45 cents on the close of trading 1 day prior to the initial announcement on November 18, 1996 to US$3.70 at the close of trading on November 27, 1996, a 722% increase in just eight trading days. The issue we address is whether the wealth effects attributable to competing explorers with tenement interests in the area arose from information transfer, and/or news coverage. We find that initially, press coverage drove returns but stocks that received most press attention suffered the greatest long-term underperformance 1-year post-discovery. This result might be interpreted in two ways. First, the results might imply market overreaction stemming from complex information coupled with limited disclosure, an exotic location, and the existence of substantial news coverage. Alternatively, the results can be interpreted in a rational real options context. On balance, our evidence is more consistent with the latter interpretation. Our findings can be compared with those of Niederhoffer (1971), who finds investor overreaction to newspaper headlines, as well as to those of Lang and Lundholm (2000), who find that increased positive disclosure prior to a seasoned equity offering (SEO) results in post-offering underperformance. The study also provides a fascinating contrast with DeAngelo and DeAngelo (1998) who find case evidence that press coverage influenced resource allocation in an important political debate involving the primary industry in the United States. The remainder of this paper is structured as follows. In Section 2, we review the information transfer literature, and Section 3 examines literature concerned with the impact of news coverage on the capital market. 4 and 5 contain a review of our testable propositions and research methodology. 6 and 7 contain the results and conclusions of the study.

This paper has examined what drove abnormal returns generated by competing explorers following a well-known mineral discovery in South Australia. Our findings have two possible interpretations. First, the stock price changes seem explainable in a real option-pricing context. In this context, press coverage informed high variance traders about prospectivity in the region. These rational traders responded by purchasing options over future discoveries with higher probability of subsequent discovery assigned to the firms attracting press coverage. Supporting this interpretation is the technical nature of the commentary in many of the news reports that suggests that rational agents were ‘informed’ as opposed to ‘misinformed’. Further evidence of rationality is depicted in the close tracking of the press portfolio to the Helix market value post-event, supporting an interpretation consistent with stock price changes occurring in a real options context. This finding cautions against immediate assumptions of ‘irrationality’ in such circumstances. Other examples of seeming overreaction including the ‘new economy’ phenomena would make an interesting follow up. A second possibility is that press coverage had dual effects—it acted as an informing mechanism, as well as misinforming depending on the sophistication of the trader. This suggests that the case may illustrate strategies or mechanisms that both informed and uninformed traders utilise to interpret complex nonfinancial information, and potential differences in interpretation of news among traders with differing levels of information. If uninformed traders were the primary users of the press, it issues a cautionary note on dependence on news for trading information, especially in a context of poor disclosure, an exotic location and a complex information release. The complexity of geological information and the fact that no national tenement databases were publicly available suggest that uninformed traders may have been more reliant on media reports if the overreaction proposition is to be believed. This is consistent with Zucker (1978) who finds that the less experienced individuals are with an issue, the more they rely on the print media for information. Future research might be directed at partitioning on investor sophistication that may assist uninformed traders make better future decisions. The study also documents an important disclosure issue. The MPI case9 indicates that disclosure anomalies existing in the distinction between public and private companies may need to be examined. Finally, we also contribute the first successful deployment of Geographical information systems (GIS) technology in a capital market setting. Combining interdisciplinary technology platforms and theory with the financial economics literature seems an interesting field for future enquiry.