https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4428232 Skip to main content PDF iconDownload This Paper Open PDF in Browser Add Paper to My Library Share: * * * * Permalink Using these links will ensure access to this page indefinitely [https://papers.ssrn.] Copy URL [https://dx.doi.org/1] Copy DOI Finfluencers Swiss Finance Institute Research Paper No. 23-30 57 Pages Posted: 3 May 2023 Last revised: 18 Jul 2023 See all articles by Ali Kakhbod Ali Kakhbod University of California, Berkeley Seyed Mohammad Kazempour Rice University - Jesse H. Jones Graduate School of Business Dmitry Livdan University of California, Berkeley Norman Schuerhoff Swiss Finance Institute - HEC Lausanne Date Written: July 5, 2023 Abstract Tweet-level data from a social media platform reveals low average accuracy and high dispersion in the quality of advice by financial influencers, or "finfluencers": 28% of finfluencers are skilled, generating 2.6% monthly abnormal returns, 16% are unskilled, and 56% have negative skill ("antiskill") generating -2.3% monthly abnormal returns. Consistent with homophily shaping finfluencers' social networks, antiskilled finfluencers have more followers and more influence on retail trading than skilled finfluencers. The advice by antiskilled finfluencers creates overly optimistic beliefs most times and persistent swings in followers' beliefs. Consequently, finfluencers cause excessive trading and inefficient prices such that a contrarian strategy yields 1.2% monthly out-of-sample performance Keywords: Finfluencers, social media, mixture modeling, retail traders, homophily, belief bias JEL Classification: G12, G14, G41 Suggested Citation: Suggested Citation Kakhbod, Ali and Kazempour, Seyed Mohammad and Livdan, Dmitry and Schuerhoff, Norman, Finfluencers (July 5, 2023). Swiss Finance Institute Research Paper No. 23-30, Available at SSRN: https:// ssrn.com/abstract=4428232 or http://dx.doi.org/10.2139/ssrn.4428232 Ali Kakhbod (Contact Author) University of California, Berkeley ( email ) Haas School of Business 2220 Piedmont Ave Berkeley, CA 94720 United States Seyed Mohammad Kazempour Rice University - Jesse H. Jones Graduate School of Business ( email ) 6100 South Main Street P.O. Box 1892 Houston, TX 77005-1892 United States Dmitry Livdan University of California, Berkeley University of California, Berkeley ( email ) 545 Student Services Building, #1900 2220 Piedmont Avenue Berkeley, CA 94720 United States (510) 642-4733 (Phone) Norman Schuerhoff Swiss Finance Institute - HEC Lausanne ( email ) Chavannes-pres-Renens Switzerland PDF iconDownload This Paper Open PDF in Browser Do you have a job opening that you would like to promote on SSRN? 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