The Effects of Fake News on Business Organisations: Evidence from an Event Study on US Listed Companies
Author:Aivaz Kamer-Ainur and Lavinia Mastac
JEL:G14, G12, G18, D83; L82.
DOI:10.24818/EA/2026/73/1098
Keywords:fake news, event study, abnormal returns, capital market, contagion, business organisations, information asymmetry.
Abstract:
This study examines the market impact of fake news on publicly traded companies in the U.S., using an event study analysis applied to a sample of 30 confirmed cases of misinformation that affected U.S. companies between 2020 and 2025. From the perspective of the economy of information, fake news constitutes a major source of information asymmetry, with direct effects on market value, company reputation, and the rationality of investor decisions. Using a single-factor market model estimated over a 252-day period, with the SandP 500 index as the benchmark, events are classified into five categories: company-specific (A), contagion (B), market-wide systemic (C), null/control cases (D), and SEC-documented pump-and-dump schemes (E). The results show that fake news generally generates significant abnormal returns on the day of the event, with a predominantly negative directional trend, suggesting that disinformation rapidly erodes investor confidence in the targeted organisations. Contagion effects prove to be the most systematic and powerful, indicating that disinformation can extend beyond the target company and affect entire sectors. The inclusion of null cases validates the methodology, confirming that in the absence of an active disinformation mechanism, no measurable effects are recorded. The proposed multi-category framework demonstrates that aggregating heterogeneous types of disinformation can mask relevant specific effects, with important methodological implications for future research. For business organisations, investors, and regulators, the findings underscore that information risk is not uniform and requires differentiated management strategies depending on the mechanism and context of disinformation.