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We examine the impact of Twitter attention on stock prices by examining over 21 million company‐specific tweets over a 5‐year period. Through a quasi‐natural experiment identifying official Twitter outages, we find that Twitter influences stock trading, especially among small, less visible securities primarily traded by retail investors. In addition, we determine that Twitter activity is associated with positive abnormal returns and when tweets occur in conjunction with traditional news events, more information is spread to investors. Finally, we show that retail investor activity drives the Twitter effect as institutional investors less actively trade the affected stocks.

No abstract

The value of a mutual fund to its fund family is its ability to generate revenue. This revenue comes from a fund's capacity to increase its assets under management, which, in turn, increases the fees collected by the fund and results in additional revenue for the fund family. Evans (2010) discusses four methods that are used by fund families to increase revenue, one of which is fund performance.It is well established in the literature that the mechanism by which performance leads to increased revenue is the relationship between past performance and current period inflows (Ippolito, 1992;Chevalier and Ellison, 1997; Sirri and Tufao, 1998). As a fund outperforms, investors chase performance, which increases assets under management and provides additional fee revenues for the family. However, competing on the basis of performance is a difficult task given the documented underperformance of mutual funds (Jensen, 1968;Carhart, 1997;French, 2008;Fama and French, 2010). Nevertheless, outperformance does occur and may be the result of favorable treatment of a specific fund within a family (Guedj and Papastaikoudi, 2004;Gaspar, Massa, and Matos, 2006) or incubation (Evans, 2010).The process of mutual fund incubation begins when fund families internally launch small funds with low levels of total net assets. After a period of evaluation, the family determines which mutual funds to publicly launch and which funds to discontinue. By taking advantage of the incubation process and the established relationship between past performance and current period inflows, mutual fund families are able to selectively launch incubated mutual funds that, on