The price of controversy: CEO Twitter activity and stock market performance

This study examines how controversial CEO communication on social media influences stock market outcomes, providing a novel measure of organization-public relationship quality. Drawing on digital public relations and financial economics frameworks, we analyze controversial tweets sent by S&P 500 CEOs from 2009 to 2023. We identify controversial messages through two key indicators: the ratio of replies to retweets and sentiment analysis of public responses. Our findings reveal that controversial CEO tweets lead to immediate declines in firms’ stock market value, with effects amplified for “celebrity” CEOs but partially buffered by high message visibility. These findings extend public relations theory by quantifying the reputational risks of executive social media communication and introducing public relations scholars to a novel, stock market-based framework for measuring both immediate and longer-term impacts of relationship damage. • Study quantifies how controversial CEO tweets affect stock market returns. • Introduces regression-based stock market-based event studi es as a new tool for public relations research. • Controversial CEO messaging negatively impacts firm value as reflected in stock market returns. • “Celebrity” CEOs face greater market penalties for controversial social media posts. • High message visibility can buffer against some negative effects of controversial CEO communication.