Twitter Follower Growth: Social Media Engagement as Investment Indicators

Abstract

This paper investigates the relationship between Twitter follower growth and stock returns. Firms with significant follower growth tend to be growth-oriented firms in the consumer goods and high-technology sectors. An investment strategy based on Twitter follower growth demonstrates market outperformance, especially for shorter rebalancing intervals. Largecap, growth-oriented, and volatile stocks are more likely to have Twitter accounts and exhibit higher long-term returns. Firms with significant growth in Twitter followers are associated with higher future returns, with stronger predictability for large-cap stocks. These findings suggest that social media engagement metrics serve as valuable indicators for stock performance.

Keywords: Twitter, X, Followers, Investment portfolios, Stock returns

JEL Classification: G10, G11, G30