A business model predicting the impact of live-stream marketing on firms' stock price - An event study

Live stream marketing in China has been in the rage since 2019, and the e-commerce industry has expanded dramatically since the start of the pandemic. Internet celebrities, a growing number of people from different walks of life, movie stars, and TV hosts are now joining as live streamers. In February 2020, China's A-share stock market's Internet celebrity live streaming index rose by more than 20%. However, does adopting live stream marketing really have positive and significant impact on stock prices of listed companies? This study used event study analysis to investigate the impact of live stream marketing on stock prices of listed companies. After computing the normal rate (NR), abnormal rate (AR), cumulative average abnormal return (CAAR) of the subjects using EXCEL and SPSS and conducting a significant analysis of the CAAR, this study found that live stream marketing events have a positive influence on stock prices of listed companies. Live streaming has brought new economic vitality, however, with the existence of chaos phenomenon on the unmatured industry standards, access thresholds, and industry management at the same time. This study tries to organize a conceptual framework for discussion, and from a practical perspective, to summarize the reasons why companies use live stream marketing to influence stock prices: (1) Live stream marketing can boost sales in a short amount of time. (2) The stock price is influenced by live stream marketing's dramatic sales. (3) Brand awareness, which helps forecast the stock price, is promoted. At the same time, live stream provides significant advantages for companies. However, there is no certain supporting business model predicting how live stream marketing significantly affects the companies' stock price. Therefore, the authors, from a theoretical perspective, tried to solve the problem by seeking a stable business model for predicting the influence of live stream marketing on the stock price. In short, the influence of internet celebrity marketing has become a new significant variable and greatly impacted the firm's stock market price and the relevant research regarding this phenomenon is still scarce; it is necessary to study this hot topic at this stage, which is the research motive of this study.