The Power of Social Sentiment: Recent Icahn Tweet Drives Investor Behavior
16 June 2014
By John Schoeler
Our good friends and partners at Finmaven posted an excellent blog post last week regarding a tweet that was published on Friday. June 6 from high profile activist Carl Icahn disclosing his 9% position in Family Dollar. The tweet was widely retweeted and the story was picked up by the news media. The tweet was published just two minutes after the closing bell that Friday and over the weekend during after-hours trading, Family Dollar’s stock price grew rapidly and opened to an 8 point growth on Monday.
Disclosed a 9% position in FAMILY DOLLAR today. Hope to continue our streak of value enhancement. Read our 13D here: http://t.co/0FKHMSFyAZ
— Carl Icahn (@Carl_C_Icahn) June 6, 2014
This is an excellent showcase for the importance of monitoring social sentiment and having alerts in place so that you can catch potential groundswell tweets in real-time. Our new Q4 Surveillance product is the perfect solution to ensure that your company is catching big news tweets and blog posts regarding your company/industry as they are published. Even before Icahn’s tweet was published and really broke into the ‘Twitter-sphere’, there was a tweet from Charles Gasparino of Fox Business News announcing that he had spoken to Icahn about his desire for a merger between Dollar General and Family Dollar. This tweet had already started to gain traction when the Icahn tweet came out. With Q4 Surveillance, an alert would have been issued when the first tweet was sent out, informing the Family Dollar IR team that a tweet had been published using their cashtag that was gaining traction. Knowing that it would only be a matter of time before Icahn made a statement of his own, Family Dollar would have the opportunity to prepare for the coming wave of shareholder and media attention.
— Charles Gasparino (@CGasparino) June 6, 2014
Not only to do companies have to look out for the big name players like Icahn, they also have to be aware of the fact that anyone with a Twitter account can break a story, and depending on their online clout, have the ability to push that story to the forefront of Twitter. With the correlation between the amount of online activity around Family Dollar and the huge price jump of the company’s stock during after-hours trading over the weekend, there is no question how much influence social media has on the stock performance of a company.
For us at Q4, this is a perfect example of why IROs need to be aware of their company’s online sentiment in real-time. Having a system set up like Q4 Surveillance is critical as it ensures you are being kept up to date on what is being said about your company in the fast paced world of Twitter. Being on top of information that is quickly snowballing like this recent Family Dollar news is imperative to maintaining your corporate voice of authority. Tweets like this can often spark a great deal of online conversation and speculation. A monitoring solution not only alerts you to the changes in sentiment early on, it also lets you track the conversations as they happen, keeping you in the know and giving you the opportunity to steer the conversation in a direction that is beneficial to your company and it’s stakeholders.