Discretionary dissemination on Twitter

• Main Authors: CROWLEY, Richard M., HUANG, Wenli, LU, Hai
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: disclosures; discretionary dissemination; social media; Twitter; Accounting; Corporate Finance; Social Media
• Online Access: https://ink.library.smu.edu.sg/soa_research/2052; https://ink.library.smu.edu.sg/context/soa_research/article/3079/viewcontent/DiscretionaryDissemination_Twitter_pvoa_cc_nc_nd.pdf
• Institution: Singapore Management University

The study provides large-scale descriptive evidence on the timing and nature of corporate financial tweeting. Using an unsupervised machine learning approach to analyze 24 million tweets posted by S&P 1500 firms from 2012 to 2020, we find that firms are more likely to tweet financial information around significantly negative or positive news events, such as earnings announcements and the filing of financial statements. This convex U-shaped relation between the likelihood of posting financial tweets and the materiality of accounting events becomes stronger over time. Whereas research based on early samples concludes that firms are less likely to disseminate financial information on Twitter when the news is bad and material, the symmetric dissemination behavior we find suggests that these conclusions should be revised. We also show that a machine learning algorithm (Twitter-Latent Dirichlet Allocation) is superior to a dictionary approach in classifying short messages like tweets.