The Effect of Social Media Response to Fake News on Stock Price of the Company

Student: Gaffanova Aliia

Supervisor:

Faculty: St.Petersburg School of Economics and Management

Educational Programme: Management (Bachelor)

Year of Graduation: 2020

Social media has extended into every sphere of our lives, and businesses are not an exception. The goal of the proposed research is to investigate the way companies are affected by social media coverage. It is hypothesized that reaction of social media users on news of a particular company have a linear and strong relationship with its stock price. The data for the study consists of a stock price history for companies among various industries (Telecom Services, Broadcasting, Entertainment, Software and others) and are drawn from Yahoo! Finance website. Also, information about social media response directed towards these companies is analysed. For that purpose, historical data from Twitter is utilised. A regression and correlation analyses are applied to find a relationship between stock price changes and Twitter data. The results of a regression analysis have shown that stock price changes have a significant relationship with total number of retweets on Twitter social media platform. Keywords: event study, stock market, fake news, social media response

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