Social media influence on U.S retail investment decisions: evidence from reddit and X (Twitter)
Influencia de las redes sociales en las decisiones de inversión minorista en EE. UU.: Evidencia de Reddit y X (Twitter)
DOI:
https://doi.org/10.51473/rcmos.v1i1.2025.1072Palavras-chave:
Behavioral Finance, Retail Investors, Social Media, Investment Decisions, AccountingResumo
This study investigates the influence of social media platforms, specifically Reddit and Twitter, on retail investment decisions in the United States up to February 2022. Based on concepts from behavioral finance and digital communication theory, the research examines how sentiment, narratives, and discussion trends on these platforms affected individual investor behavior and contributed to short-term volatility in financial markets.
Employing a mixed-methods approach, the study combines qualitative analysis of high-engagement posts from Reddit’s r/WallStreetBets and Twitter with quantitative data on price movements and trading volumes of selected assets. The analysis focuses on securities that experienced notable attention from retail investors through social media activity prior to early 2022, including GameStop, AMC Entertainment, Bed Bath & Beyond, and Dogecoin.
The findings indicate that social media sentiment significantly influenced investment decisions among retail investors, particularly those with limited market experience. Furthermore, sudden valuation fluctuations associated with viral content led to internal corporate responses such as adjustments in earnings forecasts, changes in liquidity strategies, and shifts in investor communications. This study contributes to the understanding of digitally mediated investing by highlighting its impact not only on asset prices but also on firm-level financial management.
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Referências
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Copyright (c) 2022 Daniel Santo Padilla Garcia, Leandro Jorge Yacoubian (Autor)
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