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We examine the value implication of social media anonymity in the context of the stock market. Exploiting China¡¯s regulatory change that removes anonymity and requires real name registration in social media, we find that such a policy leads to a significant decrease in firm value, especially when investors rely more on social media for stock information. We further show that the treatment leads to lower stock price informativeness, higher stock crash risk, poorer corporate disclosure, and more earnings manipulation. Overall, we provide evidence that removing social media anonymity decreases firm value through the channel of worsening firms¡¯ information environment.

zcarol2@ceibs.edu