How Many Words is a Picture Worth? Using Emojis from Social Media to Predict Future Stock Returns

Using a new and comprehensive sample of more than 67 million Twitter posts referencing Russell 3000 firms between 2012 and 2021, we introduce a novel, unsupervised method of scoring the sentiment of emojis. Our method generates point-in-time dictionaries that map individual emojis to the contextual sentiment of recent tweets that contain them. In out-of-sample tests, we find that even controlling for the sentiment extracted from words, emoji sentiment correctly predicts future firm-level stock returns. Understanding the sentiment of emojis has become increasingly important as individuals continue to adopt these new forms of communication