Abstract

This paper investigates how companies can utilise Twitter social media-derived sentiment as a method of generating short-term corporate value from statements based on initiated blockchain-development. Results indicate that investors were subjected to a very sophisticated form of asymmetric information designed to propel sentiment and market euphoria, that translates into increased access to leverage on the part of speculative firms. Technological-development firms are found to financially behave in a profoundly different fashion to reactionary-driven firms which have no background in ICT technological development, and who experience an estimated increased one-year probability of default of 170bps. Rating agencies are found to have under-estimated the risk onboarded by these speculative firms, failing to identify that they should be placed under an increased degree of scrutiny. Unfiltered market sentiment information, regulatory unpreparedness and mispricing by trusted market observers has resulted in a situation where investors and lenders have been compromised by direct exposure to an asset class becoming known for law-breaking activity, financial losses and frequent reputational damage.