Financial YouTube Channels and the Capital Markets

A recent Nasdaq study of retail investors revealed that, relative to older investors, younger investors obtain a significantly higher portion of their investment information from social media platforms like YouTube. We examine content creators who effectively serve as financial advisers via their YouTube channels (“Financial YouTubers”). We find significant market reactions and increases in measures of liquidity, which are mainly driven by the trading of retail investors. Standard measures of video transcripts reinforce the baseline event window returns and changes in liquidity. The association between Financial YouTuber videos and market measures is robust to analyses that limit confounds from other news releases. We provide preliminary analysis using an emotion AI tool that measures attributes of the audio and video content, and results are consistent with these measures providing incremental explanatory power for returns surrounding video uploads. Finally, we examine variation in disclaimers accompanying videos and we find moderated market responses to videos with disclaimers.