Business journalist Max Frumes writes about how computer software often misses important news when it writes earnings stories.
Frumes, the founder of Quant Media, writes, “On Aug. 1, sports apparel and footwear company Under Armour reported that it would be undergoing an operational restructuring that would include layoffs and cost from $110 million to $130 million for the fiscal year. The stock dropped 10% by the end of the trading day following the announcement.
“If you relied on the Associated Press’ coverage, you wouldn’t have known any of that. They covered it – but the story was written by a robot, as are thousands of articles on corporate earnings the AP is presently publishing with almost no human oversight.
“AP’s three-year-old robot reporting program is powered by artificial intelligence technology provider Automated Insights, which has a natural language tool that produces readable stories from earnings announcements. The headline for Under Armour’s second quarter is ‘Under Armour reports 2Q loss’ and the story leads with this: ‘Under Armour Inc. (UAA) on Tuesday reported a loss of $12.3 million in its second quarter. On a per-share basis, the Baltimore-based company said it had a loss of 3 cents. The results exceeded Wall Street expectations.’
“Nowhere in the rest of the story does it mention the restructuring.”
Read more here.
