Abstract
In Indonesia's capital market, there was a phenomenon that famous influencers seem to lead to behavioral bias in the stock market. The stock price changed significantly after those stock influencers shared information or recommended certain stocks. This research examined how the stock influencer's credibility affected investors' investment in recommended stock. We collected data from 132 individual investors who participated in the research. We used a questionnaire with a 5-Likert scale. The result showed that an influencer's credibility had a significant influence on investors' herding behavior. However, there was no significant evidence that financial literacy matters in that relationship. Interestingly, we found there was no significant difference in herding behavior between millennial and non-millennial investors.
Highlights
IntroductionSome cases showed how a stock price moved significantly after an influencer recommends it or shared positive information regarding the stock on their social media
Stock influencer was a new phenomenon that comes up in the stock exchange market
The education level of respondents was dominated by bachelor degrees (79%). 54% of respondents were still actively investing in Indonesia Stock Exchange, 28% of respondents rarely invested, and 9% were no longer active in the Indonesia Stock Exchange
Summary
Some cases showed how a stock price moved significantly after an influencer recommends it or shared positive information regarding the stock on their social media. Elon Musk- the CEO of Tesla, who had more than 49 million followers- often posted on his Twitter information on where he made investments. Musk's tweets could influence the public, as shown on the stock's price following his tweets. Tesla's stock price fell by 7% after Musk announced he took Tesla private [1]. Shopify's stock price rose after Musk said it was “great” [15]. In another case, when Elon Musk posted “I kinda love Etsy,” Etsy's stock price rose nearly 10% [16]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
