The Convergence and Divergence of Investors’ Opinions around Earnings News: Evidence from a Social Network
نویسندگان
چکیده
We collect a unique dataset of Twitter posts to examine the change in investor disagreement around earnings announcements. We find that investors’ opinions can either converge (reduced disagreement) or diverge (increased disagreement) around earnings announcements. While the convergence of opinion is associated with lower earnings announcement returns, the divergence of opinion is associated with higher earnings announcement returns. Consistent with recent theory, both the convergence of opinion and the divergence of opinion are associated with greater volume reaction to earnings news.
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