Abstract
Our research explores the causes of the Twitter activity in highly technological start-ups that finance their activities via ICOs. By relying on weekly data of 297 ICOs for the period 2018-2020 (36,134 obs), we examine how major exogenous events affect the number of tweets issued by the start up. Then, we explore how the community of followers reacts to the tweets. We discover that events/shocks external to the firm, affect its activity in issuing tweets by reducing it. Moreover, our evidence indicates followers’ reaction is positively related to the tweets issued by the firm and negatively related to major events/shocks unrelated to the firm. Intriguingly, followers’ reaction has an inverted U-shaped relation with the firm’s Twitter volumes suggesting that excessive Twitter activity can have an adverse effect on the further dissemination of tweets. Our results, robust to alternative estimations techniques, stress the important role of Twitter as information disseminator, legitimizer, and as an endorser for highly opaque firms highlighting the importance of this type of communication.
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