Abstract

http://ssrn.com/abstract=1807265
 
 

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Wisdom of Crowds: The Value of Stock Opinions Transmitted Through Social Media


Hailiang Chen


City University of Hong Kong - Department of Information Systems

Prabuddha De


Purdue University - Krannert School of Management

Yu Jeffrey Hu


Georgia Institute of Technology - Scheller College of Business

Byoung-Hyoun Hwang


Cornell University - Dyson School of Applied Economics and Management; Korea University - Department of Finance

December 8, 2013

Review of Financial Studies (RFS), Forthcoming

Abstract:     
Social media has become a popular venue for individuals to share the results of their own analysis on financial securities. This paper investigates the extent to which investor opinions transmitted through social media predict future stock returns and earnings surprises. We conduct textual analysis of articles published on one of the most popular social-media platforms for investors in the United States. We also consider the readers’ perspective as inferred via commentaries written in response to these articles. We find that the views expressed in both articles and commentaries predict future stock returns and earnings surprises.

Number of Pages in PDF File: 52

Keywords: Investor-turned-advisors, Social media, Financial markets

JEL Classification: G11, G12, G14

Accepted Paper Series





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Date posted: April 12, 2011 ; Last revised: August 18, 2014

Suggested Citation

Chen, Hailiang and De, Prabuddha and Hu, Yu Jeffrey and Hwang, Byoung-Hyoun, Wisdom of Crowds: The Value of Stock Opinions Transmitted Through Social Media (December 8, 2013). Review of Financial Studies (RFS), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1807265 or http://dx.doi.org/10.2139/ssrn.1807265

Contact Information

Hailiang Chen (Contact Author)
City University of Hong Kong - Department of Information Systems ( email )
Kowloon Tong
Hong Kong
Prabuddha De
Purdue University - Krannert School of Management ( email )
403 West State Street
West Lafayette, IN 47907-2056
United States
765-494-0699 (Phone)
HOME PAGE: http://www.krannert.purdue.edu/directory/bio.asp?username=pde
Yu Jeffrey Hu
Georgia Institute of Technology - Scheller College of Business ( email )
800 West Peachtree St.
Atlanta, GA 30308
United States
Byoung-Hyoun Hwang
Cornell University - Dyson School of Applied Economics and Management ( email )
Ithaca, NY
United States
HOME PAGE: http://www.bhwang.com
Korea University - Department of Finance
Seoul, 136-701
Korea
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