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1. Introduction
Social media is now seen as the ideal investor relations management platform for organizational performance, both financial and non-financial. It is perhaps becoming the primary source for investors looking for financial reports from a company (Zhou et al., 2014). This means that social media have significant advantages such as faster and real-time information dissemination, as well as more manageable, more comprehensive and cheaper access. Though several studies have shown that companies are currently disclosing financial information on their websites (Bonsón and Flores, 2011; Lyon and Montgomery, 2013) and that the level of disclosure has increased in recent years. To sum up, there is less evidence on the use of social media for corporate disclosure.
According to Kirk and Vincent (2014), the purpose of investor relations by a corporation is to handle its communications with its stakeholders. Generally, activities in investor relations are used as tools to decrease the asymmetry of information between a corporation and its capital market participants by broadcasting information that might be pertinent to the pricing of a corporation’s stocks (Cheng et al., 2010).
In all sectors of the economy and all corporations, corporate information has turned out to be the “nerve of war.” Having valuable and precise corporate information before a corporation’s competitors do and understanding how to make it accessible to those who can profit from it are advantages that create the difference. Previously, pertinent reporting was reserved for the elite. Nowadays, corporate information is available to everybody and companies expect their stakeholders to be decision-makers who have the competence to filter out pertinent information, process it, make it accessible and disseminate it to share knowledge. The information available from our corporations is enormous and is rapidly growing.
Consequently, social media can provide a revolutionary and exceptional method for corporations to connect directly with their stakeholders, especially investors and disclose corporate information (Bonsón and Flores, 2011). Traditionally, corporations announce earnings by sending press releases to equity research databases, newswire services and select financial institutions and brokerage firms (Reilly and Hynan, 2014). In this way, companies broadcast the news one time and do not know how many individuals obtain the information. In comparison, social media permit a company to broadcast various messages over time directly to a...