Quantifying effects of company mergers and acquisitions on online social networks

Mergers and Acquisitions (M&As), as transformative corporate events, providecompanies opportunities to enhance operational efficiency, achieve growth, andstrengthen their competitive edge, while affecting a broad range of stakeholders,including employees, executives, shareholders and investors. Considering its reachand influence, social media serves as a powerful tool for investigating events ofimportance. While previous research utilized social media data in various financialsettings, there remains a significant gap in understanding how M&As resonate on thesocial media accounts of acquirer and target companies and their executives. Thisstudy bridges this gap by combining extensive datasets from Thomson Reuters, X(formerly Twitter), and Crunchbase to analyze the impact of M&A events. Employinga Difference-in-Differences (DiD) methodology, we examine post-announcementactivity and engagement on the X accounts of companies and executives. Our findingsreveal a significant and measurable influence of M&As, reflected in followers,statuses, and engagement metrics of treatment and control groups. Notably, companyaccounts are more affected than executive accounts. Additionally, target companiesand executives experience a pronounced increase in followers and engagementcompared to acquirers, while acquirer companies show a significant upward trendin statuses following the event. By uncovering the distinct impacts of M&As onX accounts of key stakeholders—companies and executives—this study offers comparativeinsights into the dynamics of acquirer and target groups. Moreover, ithighlights the effectiveness of causal inference methods, such as DiD, for analyzingthe impact of significant events on social media data