Traditional Media, Twitter and Business Scandals

We examine how traditional media and Twitter cover four business scandals: Wells Fargo fake accounts, EpiPen pricing hikes, Samsung Note 7 faulty battery, and Volkswagen's cheating in emission tests. There are over 500 articles from Wall Street Journal, New York Times, Washington Post and USA Today and over 400 thousand tweets related to these events. Media organizations including newspapers, TV networks, and other media outlets are active Twitter users with significant followers. They only sent 1% of the scandal related tweets, but their tweets account for 39% of Twitter users that follow all scandal related tweets. Newspaper articles are more highly associated with a firm's abnormal stock returns and trading volumes than individual tweets. Besides disseminating and magnifying the content of traditional media, individuals provide news lead to traditional media through Twitter (e.g., EpiPen). They also lead newspaper coverage (more timely). However, media and individual Twitter users differ in which scandals to cover and disseminate. Overall, we conclude that social media such as Twitter complement rather than substitute traditional media in covering business scandals