Metaverse and Stock Market—A Study Based on Fama-French Model

Abstract

Stock prices reflect the value of anticipated future profits of companies. Since business cycle conditions affect the future profitability of firms, expectations about the business cycle will impact the stock value of firms. Recently, the popularity of Metaverse in the global financial market has been increasing. One of the novel features of this paper is to incorporate a link between stock price movements and Metaverse. By implementing the three-factor and five-factor Fama-French model, the author selects different industries to better study the impact of the Metaverse in different industries in the U.S. stock market. The data is derived from the New York Stock Exchange, the American Stock Exchange, and the Nasdaq Stock Market. The results indicate that Metaverse has affected the stock price of technology companies, especially the monopolies of the technology related companies. Moreover , the emergence of Metaverse has influenced the stock price of the real estate industry. Not only the worldwide Internet giants such as Meta, Tencent, NetEase, ByteDance, etc. are taking actions to seize the great opportunities of Metaverse, but more small and medium-sized enterprises are following the trend. Undoubtedly , Metaverse has brought an innovative business model to the financial market and the world. It hopes that the results of this paper would help investors better understand the stock market of both technology and Meta related companies with the storm of the Metaverse.