The impact of social media discourse on financial performance of e-commerce companies listed on Borsa Istanbul

Abstract

This research investigates how changes in public discourse on social media (particularly Twitter, now X) influence financial performance of companies listed on the e-commerce XTCRT index of Borsa Istanbul amid the COVID-19 pandemic. Utilising a unique 4-layer network structure, the study integrates daily closing prices, highest and lowest values, and trading volume data of these companies with Twitter discussions on six categories: culture, economy, health, politics, technology, world affairs. By using advanced computational methods such as multilayer network analysis, long short-term memory architecture, nonlinear autoregressive distributed lag analysis, we find a high responsiveness of the e-commerce index to social media content, particularly in discussions related to health, technology, world affairs. The study underscores that social media discussions significantly shape index composition, resulting in noticeable shifts in market dynamics, including fluctuations in stock prices, trading volumes, and market sentiment. Our study advocates for a more advanced approach to market analysis that incorporates the dynamics of online public discussions.