The Huffington Post reported Tuesday that Derwent Capital Markets, a London-based hedge fund, has invested $40 million to "obtain exclusive rights" to an algorithm that compares the value of the Dow Jones Industrial Average to the "collective mood" of Twitter users.
The Indiana Daily Student initially reported Monday that fund owner Paul Hawtin hired Johan Bollan and Huina Mao, developers of the algorithm, as private consultants. The paper reported that a licensing agreement is pending between the University of Indiana and Derwent Capital Markets.
Bollan and Mao released a paper in October 2010 outlining their model, which uses OpinionFinder and Google-Profile of Mood States to track keywords used to describe moods on Twitter, and compares the results to movements in the index. The developers claim an accuracy of 87.6%.