Amy Chozick and Nicole Perlroth of the New York Times write Monday about how social media is affecting the stock market in the wake of the fake tweet last week from the Associated Press.
Chozick and Perlroth write, “The decision to allow market information on social media came after Reed Hastings, chief executive of Netflix, had posted on Facebook that the service had exceeded one billion hours of streamed video a month, sending its stock price up.
“‘We appreciate the value and prevalence of social media channels in contemporary market communications, and the commission supports companies seeking new ways to communicate,’ the S.E.C. said on April 2.
“Two days later, Bloomberg introduced a feature on its financial data terminals that incorporates a stream of relevant Twitter posts delivered to investors. All of Bloomberg’s more than 310,000 subscribers, who pay at least $20,000 a year for access to the terminals, now have access to those posts, which the company says are clearly identified as Twitter messages.
“‘The S.E.C.’s decision reflects the reality that we were dealing with in that this information is being distributed by companies and investors are consuming it and we needed to get it on the terminal,’ said Brian Rooney, the company’s core product manager for news, adding, ‘We’re not in a world where people live in a vacuum.’
“At the same time, the use of algorithms designed to peruse millions of sources of information like blogs and social media to analyze and execute trades is only becoming more widespread.”
Read more here.
