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Visuals and attention to earnings news on twitter

Author

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  • Alexander Nekrasov

    (University of Illinois at Chicago)

  • Siew Hong Teoh

    (UCLA Anderson School of Management)

  • Shijia Wu

    (The Chinese University of Hong Kong)

Abstract

We propose the visual attention hypothesis that visuals in firm earnings announcements increase attention to the earnings news. We find that visuals in firms’ Twitter earnings announcements are associated with more retweets, consistent with greater user engagement with announcements that have visuals. This result holds for earnings tweets sent by the same firm and on the same day in firm-level and tweet-level analyses. Consistent with managerial opportunism, firms are more likely to use visuals in their earnings tweets when performance is good but less persistent. Consistent with visuals increasin g investor attention, the initial return response to earnings news is stronger and the post-announcement response is lower when visuals are used. Our evidence of a post-announcement return reversal indicates that visuals can be a double-edged sword. Furthermore, the higher earnings response coefficient from visuals is more pronounced on days with high investor distraction (when many other firms are also announcing earnings). Graphical abstract

Suggested Citation

  • Alexander Nekrasov & Siew Hong Teoh & Shijia Wu, 2022. "Visuals and attention to earnings news on twitter," Review of Accounting Studies, Springer, vol. 27(4), pages 1233-1275, December.
    • Handle: RePEc:spr:reaccs:v:27:y:2022:i:4:d:10.1007_s11142-021-09630-8
    DOI: 10.1007/s11142-021-09630-8
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    1. Yixuan Chen & Shanyue Jin, 2023. "Corporate Social Responsibility and Green Technology Innovation: The Moderating Role of Stakeholders," Sustainability, MDPI, vol. 15(10), pages 1-20, May.

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