Wednesday, October 3, 2012

Inefficient Markets, Gangnam Style

Efficient Market sympathizers will have a hard time explaining this one. Shares of Korean firm DI have shot up 185% in the last three weeks. Was there any company news? Nope. But there is an identifiable reason for the run-up: DI's chairman is the father of a music artist's whose song has become a global hit. The company does not benefit from this, making the share price rise all the more perplexing.

As The Economist details, this is par for the course in Korea, as a number of other dubious stock run-ups (followed later, of course, by unceremonious drops) have occurred there in the past.

The song that caused the stock frenzy? Below:

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