Love Me Do: Twitter Likes and Earnings Surprise

Abstract

We introduce a new method to gauge firm-level mood using Twitter engagements on non-financial tweets. By counting likes on such tweets, we assess positive sentiment, impacting market reactions to earnings surprises. This sentiment measure doesn’t foresee earnings surprises and its market impact is short-lived, indicating it reflects mood more than informational content. However, it underscores mood’s significance in stock investment and the utility of big data for novel financial market analysis tools.