Stocktwits Tweeters as Investing Experts

Are there clearly skilled and unskilled stock-picking influencers on social media platforms such as StockTwits? If so, do investor reactions to such influencers drive out the unskilled ones? In their March 2023 paper entitled “Finfluencers”, Ali Kakhbod, Seyed Kazempour. Dmitry Livdan and Norman Schuerhoff examine skillfulness, influence and survival of StockTwits tweeters who have followers. They apply four skill metrics to measure stock-picking skill levels of these influencers to identify those who are: (1) skilled (reliably good advice); (2) unskilled; and, (3) anti-skilled (reliably bad advice). They calculate future (1 to 20 days) abnormal returns for each influencer by comparing factor model-adjusted returns (alphas) of associated stock picks before and after recommendation dates. To assess skill persistence, they compare influencer skill levels in the first and second halves of the sample. Using tweet-level and follower data from StockTwits for 29,477 influencers, matched daily stock returns and daily equity factor returns during July 13, 2013 through January 1, 2017, they find that:

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