For Fortune 500 companies, social media has become a major form of communication and point
of access to reach potential customers, employees, and shareholders. Past studies have outlined
the activity of traditional media publications and the effect they have on influencing stock prices.
These journal articles, whether positive or negative, have been found to relate to both an increase
in trading activity as well as a correlated change in a firm’s stock price. As social media becomes
a leading source of media and outlet of conversation, it is important to compare how electronic
media relates to traditional media. As firms build social media into marketing and
communication strategies it is equally as important to understand the risks and potential issues
that may arise. Corporate Facebook pages are a major target for complaints, which companies
need to decide how to best manage to maintain target levels of customer satisfaction which can
be a driver in financial performance. For this study I have developed a statistical model to
analyze the relationship between the number of posts and associated user activity on a Facebook
fan page and the performance of a stock price across one fiscal quarter. The results were not able
to systematically prove that Facebook activity can be used as a predictor of financial
performance. Future studies have the opportunity to build on this research and examine
additional factors that may provide insight in the relationship between social media and market
Understanding the Relationship Between Corporate Facebook Pages and Stock Marlet Activity.
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