Social-media youngster Twitter is all grown up. Today, news items on Twitter can move the financial markets, even when they turn out to be hoaxes. Once something is tweeted, those 140 characters can take on a life of their own. Twitter is no longer the realm of the trivial. It’s a force to be reckoned with.
You may be thinking that your clients aren’t on Twitter, so what’s tweeted there has no bearing on your business. You’re wrong. People listen to what’s said on Twitter. Information can make the leap from Twitter to traditional media outlets at the speed of light. When Twitter speaks, the people, the market and the world listen.
Here are some recent examples of the power of Twitter and social media.
1. Associated Press twitter hack. Could 140 characters really turn the stock market on its head? As you probably know, a hoaxer hacked into The Associated Press’ Twitter account recently and suggested a bombing had occurred at the White House. This tweet caused the Dow to drop 143 points in a matter of minutes, and although the market quickly rebounded once the hoax was revealed, it was a wakeup call for investors.
2. Netflix CEO and the SEC. Last summer, Netflix CEO Reed Hastings posted on Facebook that Netflix customers were viewing more than 1 billion hours of video content a month. The posting was widely reported, and Netflix stock rose 13 percent that day. As a result, the SEC put Netflix on notice that it is not to announce corporate milestones on Facebook. The SEC advised the company not to share important information through social media without first telling investors where to look for it.
AP Photo/Paul Sakuma
3. Kass and Apple. Hedge fund manager Doug Kass impacted Apple’s stock price when he sent a tweet before the company’s shareholder meeting stating that Apple might announce a stock split. Shortly thereafter, Apple shares rose 1.2 percent. Kass later tweeted that he was selling off some of his “outsized position” as the “rumor seems to be baseless.”