Bots and Earnings Announcements

Abstract

This paper relies on shocks to the CAPTCHA technology to study the effects of social media bot activity. We observe that bots drive a large amount of attention to corporate accounts around earnings announcements. In line with theoretical research, bot activity is a significant predictor of investor disagreement, which is persistent long-term. Moreover, social media bots increase analyst dispersion for the following earnings announcement. The failure of the CAPTCHA implementation technology leads to negative abnormal returns, and the failure of CAPTCHA bypassing technology leads to positive abnormal returns

Keywords

Tags of Social Finance