Social media, financial reporting opacity and return comovement: Evidence from Seeking Alpha

Rong Ding, Hang Zhou, Yifan Li

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

In this study we develop a model to analyse the interplay between coverage of a firm on social media, financial reporting opacity and stock return comovement. Our model predicts a negative association between social media coverage and co-movement, because social media facilitates the incorporation of firm-specific information into stock price. It is also predicted that the effect of social media coverage on comovement is more pronounced among firms with higher financial reporting opacity. Using data collected from Seeking Alpha, the largest crowdsourced social media that provides “third-party generated” financial analysis in US, we find results consistent with the model predictions.
Original languageEnglish
Article number100511
JournalJournal of Financial Markets
Volume50
Early online date22 Oct 2019
DOIs
Publication statusPublished - Sept 2020

Keywords / Materials (for Non-textual outputs)

  • social media
  • comovement
  • Seeking Alpha
  • financial reporting opacity

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