Investor Awareness and PSY-chology Surrounding ‘Gangnam Style’

July 16, 2013 Leave a comment

Investor Awareness and PSY-chology Surrounding ‘Gangnam Style’

Y. Han (Andy) Kim Nanyang Technological University (NTU)

Ho Sung Jung Bank of Korea

July 11, 2013

Abstract: 
The historically unprecedented success of “Gangnam Style,” the 18th K-pop single by the South Korean rapper musician PSY that went global in 2012, was an exogenous shock to investor awareness and enthusiasm about DI Corp., the company founded by the Korean rapper’s father. Equipped with Korean microstructure data that identifies non-resident foreign individual investors by their country of origin, we study the impact of investor awareness and enthusiasm about DI Corp.’s stock and related individual investor behavior. We find that the number of unique countries where non-resident foreign institutional investors place orders for the DI Corp. stock (excluding offshore Koreans) more than doubled after “Gangnam Style” was released, which supports Merton (1987). In addition, using the count of parody videos and flash mobs uploaded on YouTube from each country as a proxy for the enthusiasm of individual investors about DI Corp., we find that non-resident (resident) foreign individual investors become net buyers (sellers) when the count of the uploads increases in their country. In contrast, we find that non-resident foreign institutional investors short sell the stock after the release of the song, except for a period of excessive cost of arbitrage.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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