Strategic Use of Social Media Tone : An Analysis of Financial and Nonfinancial Tweets on Earnings Announcement Dates

This paper examines how firms use tone in social media messages related to earnings announcements. While previous research has focused on financial information shared via Twitter, little attention has been given to tone. The study finds that tweet tone is associated with earnings performance and suggests that social media messages may be positively biased even when firms report negative earnings news. However, firms may also align tweet tone with earnings news to avoid manipulation costs. Nonfinancial tweets may have a different tone pattern, with firms potentially framing them positively to distract investors from bad earnings news or release good non-earnings related news that coincides with bad earnings news. This paper sheds light on the strategic use of tone in social media messages around earnings announcements, providing insights into how firms manage their corporate messaging and investor perceptions