We’ve written before here on AllTwitter about how Twitter can be beneficial to stock market investors, with trends and patterns in Twitter chatter lending themselves to insight about stocks.
On the flip side, recent events have illustrated that Twitter can also be extremely detrimental in relation to the stock market.
Anyone with a stock portfolio: take heed.
Last week, Sarepta Therapeutics became the second company in as many days to see its shares plunge as a result of a Twitter hoax.
Someone with the Twitter user name @citreonresearc alleged improprieties at the company, after which Sarepta saw its shares plummet 9.9% in a matter of seconds. The Twitter user was posing as an influential short-seller, and tweeted that drug trial results from the biopharmaceutical company had been tainted and doctored. The account has since been suspended.
But just as a rep from short-selling firm Muddy Waters confirmed it was completely uninvolved, so too did Andrew Left, the California-based investor who runs Citron, say his company sent no messages about Sarepta.
The takeaway? With Twitter the mouthpiece of millions, everything from television to stock shares is vulnerable to information tweeted about. Even if that information is completely false.
The good news: the companies recovered from the minor crash. The bad news: as Tim McClure, equity trader at SMB Capital in New York, put it, “Not really an efficient market when fake Twitter accounts can crash stocks.”
Twitter definitely looks like the bad guy in this scenario, as anyone can register for an account with any username (that’s not already taken) and any profile image, and start sending tweets. What’s a tweep to do?
1. Verify you’re following the official Twitter account for whatever business or brand you’re interested in. That can be accomplished through a quick Google search, or by looking on the company’s website.
2. You can also take a look at any Twitter user’s profile on TwitterCounter.com. Enter their name in the top right corner of the screen, and then click on the 3-month view of their follower count. If you see any irregular jumps – like thousands of new follows in a single day and only 1 or 2 before and after – you may have found a scammer.
3. Confirm any information you receive on Twitter via another source, especially if it’s something controversial like the above-mentioned claim that Sarepta’s drug trial results were doctored.
Do you have any tips to add to the list? How would you defend yourself against falling prey to the fake tweets of @Mudd1Waters and kin?
(Image from Shutterstock)
- Twitter Launches New Business Website
- Why Now Is the Time for Your Brand to Start Posting Video on Twitter
- HootSuite Acquires Social Analytics Leader UberVU
- Lenders Are Mining Your Social Media Profiles To Help Determine Your Credit Score