Fred Thompson Unchanged on IEM after Formal Declaration of Candidacy
Thompson was trading at 23.6 cents per contract Wednesday evening, shortly after news broke of his official declaration on "The Tonight Show." By Thursday afternoon, the price had fallen slightly to 21 cents.
As of Friday morning, his contract was trading at 20.2 cents. He remained in third place on the IEM's Republican nomination market, behind Rudy Giuliani (33.1 cents) and Mitt Romney (30.5 cents).
"Thompson has been flirting with entering the race for months now, so as far as investors are concerned, he's been a candidate for quite some time," said Joyce Berg, professor of accounting in the University of Iowa's Tippie College of Business and a member of the faculty board that oversees the IEM. "His official declaration isn't adding any new information to what the IEM traders have already incorporated into their prices, so even though we saw an increase in trading activity, we did not see much change in Thompson's IEM price."
The IEM began offering Thompson contracts June 13, which sold initially at 33.8 cents and put him in first place among the Republican contenders. His price peaked at 36.6 cents on June 22 before beginning a summer-long decline.
The price bottomed out at 17 cents on Sept. 2 before rallying in the past week, when Thompson's campaign announced that his formal declaration was imminent.
Begun in 1988, the IEM is operated by the University of Iowa's Tippie College of Business as a research and teaching tool that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.
Contact: Joyce Berg, Iowa Electronic Markets, 319-335-0840