Working Papers

Comment Display Matters: Evidence from Reddit’s WallStreetBets

• Job Market Paper

Abstract. This paper measures the effect of social media information visibility on retail trading and price formation by exploiting a change in comment display in 2018 on Daily Discussion posts on Reddit's WallStreetBets. By comparing the market reactions to comments before and after the change, I find that going from a more curated but less timely display (Best Regime) to a less filtered but more timely display (New Regime) increases absolute abnormal returns and abnormal retail trading volumes in the five minutes after comment publication. Following the initial five minutes, Best Regime comments see a stronger price drift while New Regime comments see a slight return reversal. These results are driven primarily by smaller firms and firms with high Robinhood user ownership. In addition, I find preliminary evidence that information display also affects information production. 

Social CEOs: Informative Signalers or Credit Takers?

Abstract. This paper examines a novel set of CEO-initiated written communication from social media to provide evidence of CEO strategic behavior in the context of quarterly earnings announcements. Quarterly earnings announcements followed by an earnings tweet from the CEO correspond with a 1.5-2.6% higher 3-day industry-adjusted announcement return conditional on the same level of earnings surprise and are not followed by return reversals. An intraday event study around earnings tweets shows that CEOs time their tweets to `take credit' for quarters with positive stock price reactions above and beyond the earnings news. I attempt to tie this behavior pattern to CEO career management concerns and find evidence that suggests that CEOs can reduce their likelihood of being fired conditional on performance measures by leveraging social media.