Celebrities and ordinaries in social networks: Who knows more information?

- Tests whether celebrities in social network provide more information than ordinaries.
- Data are collected from the Sina Weibo, the most pervasive social media in China.
- Celebrities' posts significantly predict stock return and future public information.
- Ordinaries' posts contain only stale information.

This paper tests the information contained in messages that various types of users post on social networks. Our data come from Sina Weibo, the biggest social network in China. The users are classified as either celebrities or ordinaries. We find that postings from celebrities significantly predict stock returns, whereas postings from ordinaries have no predictive power. Furthermore, postings from celebrities contain more future public information and current private information. Ordinaries' postings contain only stale information. The event study suggests that ordinaries can be considered as information followers rather than providers. These results are consistent with the informed guru hypothesis.