Fifteen minutes of fame? The market impact of Internet stock picks

We examine 120 Nasdaq and over-the-counter "buy" recommendations by Internet sites from April 1999 to June 2001. The stock picks show substantial short- and long-run price and liquidity gains, although no new information is revealed about them. We find that stocks with lower initial liquidity have proportionately greater liquidity gains on the pick day. Further, stocks with lower initial liquidity and higher pick-day liquidity have higher pick-day excess returns. These results support the idea that stocks have multiple liquidity equilibria and that the stock picks, by coordinating uninformed trading activity, push initially illiquid stocks to a higher liquidity equilibrium.