Investors seeking quality information rely on market experts on financial news platforms such as Google Finance or Bloomberg. However, in recent years, stock discussion forums hosted on social media platforms are competing with financial news platforms and vying to become an important and credible source of information in this knowledge driven economy. Stock discussion forums are likely to attract retail investors who seek and share their opinions at no cost, and are competing with financial news platforms. This research compares the effect of information available on these two knowledge sources on stock returns. We use text mining methods to capture the sentiments revealed on a popular stock discussion forum and a news media platform and compare their ability to predict market returns. We find that sentiments from both social media and news media platforms predict future stock returns but the effect of social media appears to be stronger and more long lasting compared to news media.
Hu, Tianyou; Srinivasan, Ananth; and Tripathi, Arvind K., "Analyzing Sentiments from Social Media: The Case of Financial Markets" (2018). MCIS 2018 Proceedings. 32.