IDEAS home Printed from https://ideas.repec.org/p/men/wpaper/101_2025.html

X Bots and Earnings Announcements

Author

Listed:
  • Jan Hanousek, Jr.

    (Fogelman College of Business Economics, University of Memphis, United States)

  • Jan Hanousek

    (Department of Department of Finance and Accounting, Faculty of Business and Economics, Mendel University in Brno, Czech Republic; CEPR, London, United Kingdom)

  • Konstantin Sokolov

    (Fogelman College of Business Economics, University of Memphis, United States)

Abstract

This paper relies on shocks to the CAPTCHA technology to study the effects of social media bot activity. We observe that bots drive a large amount of attention to corporate X accounts around earnings announcements. In line with theoretical research, bot activity is a significant predictor of investor disagreement, which is persistent long-term. Moreover, social media bots increase analyst dispersion for the following earnings announcement. The failure of the CAPTCHA implementation technology leads to negative abnormal returns, and the failure of CAPTCHA bypassing technology leads to positive abnormal returns.

Suggested Citation

  • Jan Hanousek, Jr. & Jan Hanousek & Konstantin Sokolov, 2025. "X Bots and Earnings Announcements," MENDELU Working Papers in Business and Economics 2025-101, Mendel University in Brno, Faculty of Business and Economics.
    • Handle: RePEc:men:wpaper:101_2025
    as

    Download full text from publisher

    File URL: http://ftp.mendelu.cz/RePEc/men/wpaper/101_2025.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Karl B. Diether & Christopher J. Malloy & Anna Scherbina, 2002. "Differences of Opinion and the Cross Section of Stock Returns," Journal of Finance, American Finance Association, vol. 57(5), pages 2113-2141, October.
    2. Yang, Yung Chiang & Zhang, Bohui & Zhang, Chu, 2020. "Is information risk priced? Evidence from abnormal idiosyncratic volatility," Journal of Financial Economics, Elsevier, vol. 135(2), pages 528-554.
    3. Bohren, Aislinn & Hauser, Daniel, 2017. "Learning with Heterogeneous Misspecified Models: Characterization and Robustness," CEPR Discussion Papers 12036, C.E.P.R. Discussion Papers.
    4. Mitchell, Mark L & Stafford, Erik, 2000. "Managerial Decisions and Long-Term Stock Price Performance," The Journal of Business, University of Chicago Press, vol. 73(3), pages 287-329, July.
    5. Brennan, Michael J. & Chordia, Tarun & Subrahmanyam, Avanidhar & Tong, Qing, 2012. "Sell-order liquidity and the cross-section of expected stock returns," Journal of Financial Economics, Elsevier, vol. 105(3), pages 523-541.
    6. Amihud, Yakov, 2002. "Illiquidity and stock returns: cross-section and time-series effects," Journal of Financial Markets, Elsevier, vol. 5(1), pages 31-56, January.
    7. repec:bla:jfinan:v:59:y:2004:i:3:p:1259-1294 is not listed on IDEAS
    8. J. Anthony Cookson & Marina Niessner, 2020. "Why Don't We Agree? Evidence from a Social Network of Investors," Journal of Finance, American Finance Association, vol. 75(1), pages 173-228, February.
    9. Diamond, Douglas W. & Verrecchia, Robert E., 1981. "Information aggregation in a noisy rational expectations economy," Journal of Financial Economics, Elsevier, vol. 9(3), pages 221-235, September.
    10. Matthew Rabin & Joel L. Schrag, 1999. "First Impressions Matter: A Model of Confirmatory Bias," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 37-82.
    11. Angrist, J D & Imbens, G W & Krueger, A B, 1999. "Jackknife Instrumental Variables Estimation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(1), pages 57-67, Jan.-Feb..
    12. Hirshleifer, Jack, 1977. "The Theory of Speculation under Alternative Regimes of Markets," Journal of Finance, American Finance Association, vol. 32(4), pages 975-999, September.
    13. J. Aislinn Bohren & Daniel N. Hauser, 2021. "Learning With Heterogeneous Misspecified Models: Characterization and Robustness," Econometrica, Econometric Society, vol. 89(6), pages 3025-3077, November.
    14. Wright, Nataliya Langburd & Nagle, Frank & Greenstein, Shane, 2023. "Open source software and global entrepreneurship," Research Policy, Elsevier, vol. 52(9).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jan Hanousek Jr. & Jan Hanousek & Konstantin Sokolov, 2023. "X Bots and Earnings Announcements," MENDELU Working Papers in Business and Economics 2023-92, Mendel University in Brno, Faculty of Business and Economics.
    2. Jan Hanousek & Hoje Jo & Christos Pantzalis & Jung Chul Park, 2023. "A Dilemma of Self-interest vs. Ethical Responsibilities in Political Insider Trading," Journal of Business Ethics, Springer, vol. 187(1), pages 137-167, September.
    3. Ing-Haw Cheng & Alice Hsiaw, 2023. "Bayesian Doublespeak," Working Papers 135, Brandeis University, Department of Economics and International Business School.
    4. Fangjian Fu & Sheng Huang, 2016. "The Persistence of Long-Run Abnormal Returns Following Stock Repurchases and Offerings," Management Science, INFORMS, vol. 62(4), pages 964-984, April.
    5. Zhang, Teng & Li, Jiaqi & Xu, Zhiwei, 2024. "Speculative trading, stock returns and asset pricing anomalies," Emerging Markets Review, Elsevier, vol. 61(C).
    6. repec:osf:socarx:q8xvc_v1 is not listed on IDEAS
    7. Yin, Libo & Zhu, Xiaoye & Su, Zhi & Guo, Hongliang, 2025. "Is disagreement beneficial for market efficiency? Evidence from ESG ratings," Journal of International Money and Finance, Elsevier, vol. 154(C).
    8. Le Yaouanq, Yves, 2023. "A model of voting with motivated beliefs," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 394-408.
    9. Nguyen, Justin Hung & Truong, Cameron & Zhang, Bohui, 2025. "The price of carbon risk: Evidence from the Kyoto Protocol ratification," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    10. repec:osf:socarx:ud7yw_v1 is not listed on IDEAS
    11. Boehme, Rodney D. & Danielsen, Bartley R. & Kumar, Praveen & Sorescu, Sorin M., 2009. "Idiosyncratic risk and the cross-section of stock returns: Merton (1987) meets Miller (1977)," Journal of Financial Markets, Elsevier, vol. 12(3), pages 438-468, August.
    12. Craig W. Holden & Stacey Jacobsen & Avanidhar Subrahmanyam, 2014. "The Empirical Analysis of Liquidity," Foundations and Trends(R) in Finance, now publishers, vol. 8(4), pages 263-365, December.
    13. Chen, Jaden Yang, 2022. "Biased learning under ambiguous information," Journal of Economic Theory, Elsevier, vol. 203(C).
    14. Ba, Cuimin & Gindin, Alice, 2023. "A multi-agent model of misspecified learning with overconfidence," Games and Economic Behavior, Elsevier, vol. 142(C), pages 315-338.
    15. Ben-Rephael, Azi & Cookson, J. Anthony & izhakian, yehuda, 2022. "Do I Really Want to Hear The News? Public Information Arrival and Investor Beliefs," SocArXiv ud7yw, Center for Open Science.
    16. Choy, Siu Kai & Wei, Jason, 2012. "Option trading: Information or differences of opinion?," Journal of Banking & Finance, Elsevier, vol. 36(8), pages 2299-2322.
    17. Constantinos Antoniou & John A. Doukas & Avanidhar Subrahmanyam, 2016. "Investor Sentiment, Beta, and the Cost of Equity Capital," Management Science, INFORMS, vol. 62(2), pages 347-367, February.
    18. Onishchenko, Olena & Zhao, Jing & Kongahawatte, Sampath & Kuruppuarachchi, Duminda, 2024. "Investor heterogeneity and anchoring-induced momentum," Journal of Behavioral and Experimental Finance, Elsevier, vol. 42(C).
    19. Giacomo Lanzani, 2025. "Dynamic Concern for Misspecification," Econometrica, Econometric Society, vol. 93(4), pages 1333-1370, July.
    20. Kim, Donghan & Kim, Jun Sik & Seo, Sung Won, 2018. "What options to trade and when: Evidence from seasoned equity offerings," Journal of Financial Markets, Elsevier, vol. 37(C), pages 70-96.
    21. David J. Brophy & Paige P. Ouimet & Clemens Sialm, 2004. "PIPE Dreams? The Performance of Companies Issuing Equity Privately," NBER Working Papers 11011, National Bureau of Economic Research, Inc.
    22. Jiang, Lei, 2014. "Stock liquidity and the Taylor rule," Journal of Empirical Finance, Elsevier, vol. 28(C), pages 202-214.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:men:wpaper:101_2025. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Luděk Kouba (email available below). General contact details of provider: https://edirc.repec.org/data/femencz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.