Earnings Virality

65 Pages Posted: 9 Mar 2021 Last revised: 9 Dec 2021

See all articles by Brett Campbell

Brett Campbell

Yale School of Management

Michael S. Drake

Brigham Young University - Marriott School

Jacob R. Thornock

Brigham Young University

Brady J. Twedt

University of Oregon - Lundquist College of Business

Date Written: November 1, 2021


We examine the determinants and market consequences associated with earnings announcements going viral on social media, a phenomenon we label “earnings virality.” Using a comprehensive panel of historical Twitter data, we find that the typical earnings announcement receives relatively little social media coverage, but a subset go viral on social media, quickly reaching the feeds of millions of people. Viral earnings announcements generally have Twitter content that is more extreme in tone, more emotive, and contains less unique content. At the firm level, earnings virality is positively associated with revenue surprises, investor recognition, and retail investor ownership. We also observe greater investor activity around viral earnings announcements including trading volume, price volatility, retail investor trading volume, and retail stock holdings, but less professional investor search activity. Finally, our findings suggest that earnings virality is detrimental to price efficiency, as it coincides with lower market liquidity and slower price formation. These detrimental pricing effects are stronger when the average social media content is more emotional and less substantive. Overall, our evidence suggests that user-driven dissemination through social media platforms, when amplified and taken to extreme levels, can be harmful to earnings price efficiency.

Keywords: Earnings Virality, Viral, Social media, Earnings announcements

JEL Classification: G12, G14, M41

Suggested Citation

Campbell, Brett and Drake, Michael S. and Thornock, Jacob and Twedt, Brady J., Earnings Virality (November 1, 2021). Available at SSRN: https://ssrn.com/abstract=3800399 or http://dx.doi.org/10.2139/ssrn.3800399

Brett Campbell

Yale School of Management ( email )

165 Whitney Ave
New Haven, CT 06511

Michael S. Drake

Brigham Young University - Marriott School ( email )

United States

Jacob Thornock

Brigham Young University ( email )

Provo, UT 84602
United States
8014220828 (Phone)

Brady J. Twedt (Contact Author)

University of Oregon - Lundquist College of Business ( email )

Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States

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