Where were you when Carl Icahn announced his 10 per cent stake in Netflix back in October 2012? You probably can’t remember and since he didn’t join Twitter until June 2013, he certainly didn’t tweet about it. But he did tweet
in June selling his last shares in Netflix and in the process generating $1.6 billion in profits from the two-and-a-half year hold.
While tweeting to your followers is a great way to stay in touch, an even better use of Twitter might be to follow people like Icahn who don’t have a problem highlighting their investment moves. In fact, with the move to big-data analytics such a huge trend these days, Nasdaq is partnering with Market Prophit, a social media analytics firm that studies how tweets affect a company’s stock.
There’s gold in them there tweets.
“What financial advisers need to be aware of is what's happening to the holdings for clients," Morgan Downey, chief executive of Money.net, a stock data analytics platform. "They need to monitor social media because you have markets moving because of social media. The power of a single tweet could be worth billions.”
Certainly that’s the case with Icahn and Netflix but that doesn’t mean you should throw away common sense.
“Just as with anything else, whether it is people reading tweets or machines reading tweets, we have to be careful," said Dave Gerdt, senior adviser at the Hultquist Firm Advisors. "You think of the huge amount of bogus news stories that get shared on Facebook, [such as] reports of people dying that haven't really died.
"That's what you open yourself up to. You just have to have a heightened sense of skepticism."