Can public opinion manipulation disrupt markets?— A study on the impact of internet water army on corporate demand uncertainty

Using data from 2011 to 2024, this paper is among the first to empirically examine the effect of internet water army activity on corporate demand uncertainty at the micro level. Leveraging post data from the Eastmoney Stock Forum, we identify water army accounts based on textual similarity and posting behavior, and construct an index to measure water army intensity. The results show that the presence of internet water army significantly increases corporate demand uncertainty. Mechanism tests indicate that media attention amplifies this effect, while firms with high reputations are more resilient to it. Heterogeneity analysis further reveals that the effect is more pronounced in firms with deep AI deployment, those in high-tech industries, and those located outside eastern China. These findings highlight the potential disruptive power of irrational information manipulation on business expectations and resource allocation in the social media era, offering valuable empirical evidence for regulators to mitigate the risk of “information noise” and for firms to enhance their resilience to public opinion shocks.