THE IMPACT OF ELON MUSK’S TWEETS ON THE STOCK PRICE OF TWITTER
THE IMPACT OF ELON MUSK’S TWEETS ON THE STOCK PRICE OF TWITTER

Summary/Abstract: The increasing use of social media by all individuals and the rumours posted via the Internet are an important source of market information that carries both opportunities and risks. On one side it can bring high financial risks, which can often lead to movements in the massive changes of stock prices (Z. Hua, 2022). On the other side, according to Biancotti & Ciocca (Biancotti, 2021), information sharing and discussions on internet platforms, like Twitter, can improve market transparency and efficiency. Elon Musk, considered one of the richest individuals in the world, has a social network of over 110 million followers on Twitter, a social media platform that he often uses to pass along his views and opinions on various topics such as his new buy out of Twitter (Lennart, January 2023). His influence on this platform cannot be described in words as he has a pivotal public role in persuading and is an influencer for everyone. According to The Guardian, acquiring Twitter by Musk means that “the world’s richest man has bought his favourite megaphone” (R., 2022). The paper will include an event study that has adopted average abnormal returns and cumulative abnormal returns and has found a significant impact of his tweets (for an assumed risk of 5%), by using intraday data from the trustworthy data provider (Alpha Vantage), for a period of 661 minutes, ranging from -630 minutes to +30 minutes, with the 0th minute being the time of his tweet (t=0).

• Details
• Contents