Do tweets from CEOs matter to investors?

Investors feel more socially connected with the CEO who tweets, which could benefit the executive, write Andrea Seaton Kelton and Robin R. Pennington Social media provides today's CEOs a quicker and more direct way to communicate with investors. The Securities and Exchange Commission cleared public companies to use social media to disclose information as long as investors know which social media sites will be used. Despite the growth in CEOs’ social media use, we know little about how such use affects investors, and especially nonprofessional investors who are more likely to be influenced by variations in disclosure channel than professional investors. As researchers interested in how individual investors use information to make decisions, we investigated if investors react differently when receiving a tweet from a CEO, versus a standard press release, and whether the tweet leads to a more favourable outcome for the CEO.