Visuals and Attention to Earnings News on Twitter
54 Pages Posted: 7 Sep 2019
Date Written: September 3, 2019
We propose a visual attention hypothesis that visuals in firm earnings announcements increase attention to the firm. We find that visuals in firm Twitter earnings announcements increase follower engagement with the message via retweets and likes. Consistent with attention spillover, same-day other tweets with visuals increase retweets and likes. Additionally, retweets increase at the firm level and decrease at the message level with the number of firm earnings tweets on the announcement day. Firms are more likely to use visuals in their earnings messages when earnings exceed analyst consensus expectations and are less persistent, consistent with managerial opportunism. Finally, consistent with visuals increasing investor attention, the initial return response to earnings news is stronger and the post-announcement response lower when visuals are used. Furthermore, the higher ERC from visuals is more pronounced on high investor distraction days when many other firms are also announcing earnings.
Keywords: Visual, Attention, Salience, Earnings News, Twitter, Earnings Response Coefficients
JEL Classification: D21, G12, G14, G18, G38, M41
Suggested Citation: Suggested Citation