 Investors' opinion divergence, uncertainty resolution and market reactions to earnings news: Evidence from social mediaNingru Zhao, Lanlan Liu and Conghui Chen International Review of Financial Analysis, 2025, vol. 104, issue PA Abstract: We employ social media-derived measures to gauge opinion divergence among retail investors and investigate how shifts in this divergence influence asset prices following earnings announcements. We find that a higher magnitude of changes in investors' opinion divergence correlates with lower price sensitivity to earnings surprises. We test the uncertainty resolution hypotheses and reveals that the divergence of retail investors' opinions has a greater impact on firms with higher costs and risks associated with incorporating information into stock prices. Our findings remain robust after controlling for alternative explanations such as information acquisition and other news shock. This study provides insights into the dynamics of investors' opinion divergence during earnings announcements and the role of uncertainty resolution in shifting investors' opinions as well as the price discovery process. Keywords: Divergence of opinions; Market frictions; Uncertainty resolution; Social media; Earnings announcements (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925003643 DOI: 10.1016/j.irfa.2025.104277 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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