CEO social media activity and insider trading

This article studies the relationship between CEOs' social media activity and their insider trading behavior. Drawing on psychological evidence linking online activity to risk‐taking, we find that active CEOs on social media exhibit higher risk preferences and engage more in insider trading—particularly in terms of incidence, intensity, and profitability. The effects are primarily driven by insider buys (rather than sells), which are more likely to involve material non‐public information, and such opportunistic trades may increase firm reputational risk. Further analysis reveals that certain corporate governance mechanisms, such as blackout policies and compensation structures, help mitigate the negative impact.