Real returns from unreal world? Market reaction to Metaverse disclosures

David Y. Aharon, Ender Demir*, Smadar Siev

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


In this study, we present a first attempt at measuring the market reaction to firms’ SEC disclosures related to Metaverse activity. We follow the existing literature in differentiating between disclosures associated with vague future intentions or plans to adopt Metaverse activity (“Vague”), and announcements concerning actual activities related to the Metaverse infrastructure (“Clear”). Clear disclosures are associated with higher abnormal returns, in contrast to Vague ones leading to a milder response by investors in the days surrounding the disclosure. Early adopters and large-cap firms earn higher abnormal returns immediately following Metaverse disclosures than do late adopters and small-cap companies. Although the Metaverse may represent a potential growth engine for firms in the future, we document a short-term positive overreaction in share price behavior that is completely reversed within the 30 days following the announcements, regardless of the size of companies, the timing of the disclosure, or whether the disclosure was Clear or Vague.

Original languageEnglish
Article number101778
JournalResearch in International Business and Finance
Publication statusPublished - Dec 2022

Bibliographical note

Publisher Copyright:
© 2022 The Authors

Other keywords

  • Abnormal returns
  • Blockchain
  • Cumulative abnormal returns
  • Market model
  • Market-adjusted model
  • Metaverse
  • Mispricing
  • Overreaction
  • Reversal
  • Stock returns


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