7.3 Case study of Donald Trump’s Twitter attacks
The current US President, Donald Trump, often attacks companies on Twitter. Many people object to this because they fear that the companies’ stock prices will be affected adversely. However, whether Trump’s Twitter attack are seriously damaging to the stock prices is an empirical question. Assuming that Trump’s attacks are unexpected events, we can use event study methodology to answer it.
Figure 7.1 is a sample of Trump’s attack on Amazon.
Figure 7.1: Trump Tweet Attacking Amazon
I used a CNN article that listed 17 such attacks as of April 2018. I picked 13 of these for the event study. I left out a few cases where the company under attack was not traded publicly but their parent company was.
Based on this, let’s create a data frame that will hold the 13 events.
events <- data.frame(Company = c("Amazon", "Boeing", "CBS", "Comcast",
"Delta", "Facebook", "General Motors",
"Lockheed Martin", "Merck", "New York Times",
"New York Times", "Nordstrom", "Toyota"),
Ticker = c("AMZN", "BA", "CBS", "CCZ", "DAL", "FB",
"GM", "LMT", "MKGAF", "NYT", "NYT", "JWN", "TM"),
Date_Attacked = as.Date(c("2018-04-02", "2016-12-06",
"2017-02-17", "2017-11-29",
"2017-01-30", "2017-10-21",
"2017-01-03", "2016-12-22",
"2017-08-14", "2017-02-17",
"2017-01-28", "2017-02-08",
"2017-01-05")))These 13 events are listed in Table 7.1.
| Company | Ticker | Date_Attacked |
|---|---|---|
| Amazon | AMZN | 2018-04-02 |
| Boeing | BA | 2016-12-06 |
| CBS | CBS | 2017-02-17 |
| Comcast | CCZ | 2017-11-29 |
| Delta | DAL | 2017-01-30 |
| FB | 2017-10-21 | |
| General Motors | GM | 2017-01-03 |
| Lockheed Martin | LMT | 2016-12-22 |
| Merck | MKGAF | 2017-08-14 |
| New York Times | NYT | 2017-02-17 |
| New York Times | NYT | 2017-01-28 |
| Nordstrom | JWN | 2017-02-08 |
| Toyota | TM | 2017-01-05 |