#Twitter: Examining the Impact of Earnings Format Choice and Rehashing Prior Positive Information on Market Prices

Abstract

ABSTRACT Using Twitter to disseminate information has two advantages: flexibility in presentation formats and the ability to redisclose a prior period’s information—referred to as “rehashing.” Our research examines the effect of these issues on market investors’ trading. Our experimental market results suggest that nonprofessional investors presented with whole-number quarterly earnings exhibit insensitivity to the large numbers (i.e., psychophysical numbing). Further, we find evidence suggesting that investors in the whole-number condition net the rehashed quarterly earnings information with current quarterly earnings information to counteract the psychophysical numbing effects, whereas those in the earnings per share (small-number) condition display a representativeness bias toward positive news when processing the rehashed information. Our results indicate that a firm can influence investor decisions when managers strategically disseminate larger whole numbers and rehash positive earnings information. Thus, our findings contribute novel information to the extant social media literature.