TY - JOUR T1 - Target Price Rumor and Its Effect on Market Efficiency JF - The Journal of Investing SP - 93 LP - 102 DO - 10.3905/joi.2013.22.4.093 VL - 22 IS - 4 AU - Tchai Tavor Y1 - 2013/11/30 UR - https://pm-research.com/content/22/4/93.abstract N2 - The past decade has seen remarkable worldwide development in telecommunications and information technology. This process has occurred in the financial markets as well during the same period, manifesting as a significantly increased number of rumors reaching the Internet, which undoubtedly affected investors.This study focuses on a distinct, specific event—namely, target price rumors (TPR)—and examining investors’ responses to such rumors. This study consists of two main tests. The first test involves a general observation of investors’ behavior in relation to TPR. The second test observes whether or not market behavior may be predicted for the post-publicity period, based on companies’ performance prior to that period. The first test’s results suggest that the rumor was mostly effective for a five-day period, beginning three days prior to publicity and ending the day thereafter. The second test’s results indicate an inverse trend between companies’ performance prior to publication and thereafter.TOPICS: Security analysis and valuation, portfolio theory ER -