Friday 1 May 2015

Weekly Wrap Up: The £5bn tweet

Twitter got a taste of its own medicine this week when its first quarter earnings were leaked… via a tweet. Irony aside, this was no joke: it only took four tweets of 140 characters or less to wipe more than £5bn off of Twitter’s stock in the final hours of trading on Tuesday.

So how did Twitter become the victim of its own viral reach?

Twitter was supposed to announce its first quarter earnings after close of trading on the New York Stock Exchange (where the company is listed). Unfortunately for Twitter, somebody at NASDAQ, which runs Twitter’s investor relations site, decided it would be a good idea to post the results early.

Posting the results two hours early on the investor relations website might not have been such a catastrophe if no one had noticed. But a financial data platform called Selerity uses automated technology to go through the various sources and detect important events for the markets. It’s known as data scraping and it has become a powerful tool for banks, hedge funds and proprietary trading firms – in other words, those trying to get an edge over the markets.

It wasn’t the first time Selerity struck – Microsoft is among their other victims – and it probably won’t be the last. And it isn’t just Selerity that leaks earnings – according to the Wall Street Journal, Bloomberg journalists are known for trying to find corporate news releases early. All it takes is typing in the web address for a company’s earnings release and then adjusting the URL to change the number of the quarter. So it seems that this problem is quite preventable with a password, firewall, or even waiting to post the results.

What the leak meant for Twitter was that the Company didn't have the chance to present the results in a formal statement, which would have undoubtedly positioned them more favourably. There was certainly some positive news in the report: Twitter surpassed the 300 million active users mark for the first time. Instead, the bad news got out while markets were still trading and Twitter completely lost control of the narrative.

The Twitter debacle demonstrates the power and influence of social media in Financial PR and investor relations. It’s an excellent way to get good news out fast, but also difficult to control. After all, apparently not even Twitter itself can prevent damaging tweets.

As well as multiple sets of client results this week, Abchaps hosted a Technology themed Market Lunch this week where the discussion included cyber securtiy, and a sector generalist one.

Edison announced three UK equity analyst appointments: Neil Basten joins its industrials team from USS Investment Management; Lucy Codrington joins the healthcare team from SC Strategy, and Eric Opara joins the technology team from M&G Investment. Meanwhile Fidelity Worldwide Investment appointed Sajiv Vaid to its fixed income investment team as co-manager of the Fidelity MoneyBuilder Income and Fidelity Extra Income funds.

"Viral Reach" – The measurement of the number of people who saw or shared a tweet or social media post. A Tweet can now potentially reach over 300 million people - which Twitter learned the hard way is not always a good thing.

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