Retail Investors’ Perceptions of Financial Disclosures on Social Media: An Experimental Investigation Using Twitter

• In Event: Media Platforms and Information Content

Abstract

Historically, financial information was disseminated via the press release. The ability to disseminate information now exists on multiple channels beyond just the press release, with each channel reaching a different audience. With the different channels of communication come different connotations and associations that people have about the channels, which may affect the interpretation of the message thereby altering market efficiency. I investigate whether different disclosure platforms vary in persuasiveness for retail investors. Using the Elaboration Likelihood Model I experimentally test how good and bad financial information posted on a social media channel, Twitter, compares to a more traditional channel, a company investor relations page, where financial information is historically posted. I find that Twitter is negatively associated with participants’ perceptions of argument quality, source credibility, perceived usefulness and attitude.

Author

• Neal Michael Snow, University of South Florida