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Eurasian Business Review

23.02.2024 | Regular Article

The power of social media: effects of CEO tweets on stock performance

verfasst von: Adeel Ali Qureshi

Erschienen in: Eurasian Business Review

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Abstract

Twitter's massive data has been intensively explored in the stock market research in recent years as it allows researchers to relate investor sentiment and investor attention to stock performance. However, narrowing down to celebrity-like CEOs, followed by millions, allows more insight to Twitter's usefulness when these CEOs tweet about their company or its products. This study focuses on the effects of such company-oriented tweets on CEOs' companies' stock performance and trading volume. More than 27,000 account-specific tweets are retrieved for 8 CEOs spanning to around 12 years. Event study analysis is performed for stock returns and trading volume change, as it is the most appropriate method used by researchers in similar studies. In the event of an aforementioned tweet, higher stock return volatility is observed in comparison to average volatility. Statistical tests reveal that stock returns and volumes are relatively higher for companies the next day of the said tweet, depicting a relationship between CEO's tweet content and stock performance of companies.

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The software counts the words corresponding to the category to which they belong (or do not belong, or to which they belong to simultaneously) using dictionary terms.

“In technical analysis, volume measures the number of a stock’s shares that are traded on a stock exchange in a day or a period of time,” Yahoo! Finance (Kristopher 2014)

The one-day discrepancy is because the tweet may have been posted after the market was closed.

It does not start from August 17, 2016, the date of stock market data being available for Dell Technologies, because Michael Dell posted his first tweet retrieved for this study since Dell Technologies became publicly traded again.

Application Programming Interface

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Titel: The power of social media: effects of CEO tweets on stock performance
verfasst von: Adeel Ali Qureshi
Publikationsdatum: 23.02.2024
Verlag: Springer International Publishing
Erschienen in: Eurasian Business Review
Print ISSN: 1309-4297
Elektronische ISSN: 2147-4281
DOI: https://doi.org/10.1007/s40821-024-00251-0