Many who invest in the stock market all have a source of information such as financial news outlets or advisors, few if any would think to look at Twitter as a source of stock news but if you follow some big-name CEOs you might be able to get a hot tip as whatever they say may influence their company’s stock projection.
One needs only look to Elon Musk as the latest example of how his social media behaviour influenced the price of Tesla. On August 7th Musk tweeted his intentions to take the company private with funding already secured causing the price to rise 11 percent. Only to later announce the plan to take the company private was off. On September 28 it appeared that this tweet will be very costly for him and anyone who holds shares in the company as the Security and Exchange Commissions is now suing Musk for fraud and attempting to forcibly remove him as CEO. This of course caused the shares to plummet 10 percent on the day.
I have written in the past about people losing their jobs over past social media behaviour, but the consequences are usually limited to the individual, this however shows just how damaging social media can be for those in charge of billion-dollar corporations, Musk of course has the most to lose but many people have bought into his vision and stand to lose a lot of money.
There can of course be positive results as well as CEO’s and spokespeople can start to use social media to announce exciting new developments causing prices to raise for legitimate reasons and investment gurus can make comments on companies that can cause prices to fluctuate as well.
Regardless of the authors intention when they make comments on social media, if they hold enough influence they could have a lasting affect on the market. As time goes on and older generations get behind social media (like CEOs) it may be a good idea to start following them. Who knows, there next tweet may allow you to retire early.