Visuals and Attention to Earnings News on Twitter

54 Pages Posted: 7 Sep 2019

See all articles by Alexander Nekrasov

Alexander Nekrasov

University of Illinois at Chicago

Siew Hong Teoh

University of California, Irvine - Accounting Area

Shijia Wu

University of California, Irvine - Accounting Area

Date Written: September 3, 2019

Abstract

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

Nekrasov, Alexander and Teoh, Siew Hong and Wu, Shijia, Visuals and Attention to Earnings News on Twitter (September 3, 2019). Available at SSRN: https://ssrn.com/abstract=3447484 or http://dx.doi.org/10.2139/ssrn.3447484

Alexander Nekrasov (Contact Author)

University of Illinois at Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

HOME PAGE: http://business.uic.edu/profiles/alexander-nekrasov/

Siew Hong Teoh

University of California, Irvine - Accounting Area ( email )

Irvine, CA 92697-3125
United States

Shijia Wu

University of California, Irvine - Accounting Area ( email )

Irvine, CA 92697-3125
United States

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