More than one third of new investors use social media to research investment advice. If such advice is independently produced by a variety of different contributors, it can benefit investors, because research shows that averaging independent judgments generally improves accuracy. This is known as 'the wisdom-of-the-crowd effect.' However, social media platforms disseminate information using engagement algorithms that are influenced by popularity bias. The authors share findings from their research, which reveals that information on social media displays excessive optimism about future outcomes on earnings announcements and leads to price run-ups.

This case describes Johnny Fernandes' new venture, a digital-based, lifestyle and entertainment magazine for the iPad, called iMag. Johnny had always been interested in becoming a player in the international arts scene and now he seems to have the chance thanks to the tablet platform. He has spent the last five months conceptualizing iMag and creating a team of technical specialists to help him develop iMag. While encountering different challenges, (i.e., no secure revenues, uncertainty about the evolution of rich media advertising, limited financial resources) the rapid expansion of the tablet market and its corresponding applications indicate that Johnny has a true business opportunity in front of him. First of all, students have to put themselves in Johnny's shoes and design a detailed action plan that ensures iMag's future in this up-and-coming industry. Secondly, students have to identify the threats and opportunities for iMag in competing globally at an early stage.