Tweets Coming to a Bloomberg Terminal Near You
Last Thursday, Bloomberg announced that it has begun integrating Twitter functionality into its service platform. It filters company and market-centric tweets for its base of over 300,000 subscribers. This came shortly after the SEC provided guidance that would allow for companies to distribute their announcements and press releases through social media websites.
Bloomberg's service is heavily filtered and entirely focused on providing high quality, potentially market moving news to its users. Traditionally, banks and trading houses have restricted use of Twitter at the office for compliance reasons, so this service offers traders and Analysts a means of keeping up with twittersphere without resorting to their phones and without worrying the firm's legal staff.
I think that this goes a long way to confirm what we already know, that Twitter and other social media can move markets. I was curious to get an insider's view of just how important social media is in the trading world, so I reached out to a trader friend of mine for his view. Read on to hear what he had to say...
I've always known Twitter to be an important source of news and ideas for individual investors. Websites like StockTwits have been a key resource for market-related tweets for some time now. StockTwits, which is a free service, also offers a premium version for market professionals that have compliance requirements. So, what do industry professionals make of a filtered Twitter being integrated into Bloomberg?
I rang up a friend of mine who trades equities and related securities for a very large hedge fund to get his view on the service. He requested I give him a cool pseudonym for purposes of anonymity, so henceforth he shall be known as Mr. X.
Mr. X has been trading for several years. He started out with a large bank and made the move to the buyside about a year and a half ago. In his view, he thinks that the Twitter integration is a nice feature, but nothing to write home about. Markets already move when Twitter is buzzing about something. He was clear to emphasize that Tweets can move markets whether or not the information they contain is valid. All that matters is that the information is out there for people to consume and act upon.
In his view, Tweets about stocks and other securities aren't all that different from posts on message boards a few years back. Only now, anybody who tweets out something can reach a global audience, as opposed to the relatively small audience of specialized internet forums (WSO notwithstanding.) He added that he liked that Bloomberg would enable you to use Twitter in conjunction with other tools for tracking a company. It isn't so much that he didn't pay any attention to Twitter before so much as he'll now be able to easily track various metrics in one location. That's a big plus.
Interestingly, Mr. X added that there are already plenty of market news / rumor mill type websites that people in the industry use. Sites like The Fly on the Wall and Trade the News have been providing rumors and related market moving news for some time. Twitter is simply another tool in the investing arsenal to put to work, and Bloomberg is simply organizing and filtering it in a way that makes it (potentially) more efficient.
The last point he made was that, again, even though sources like Twitter can often be filled with inaccurate information, it's much better to disseminate the information to the masses instead of having it hoarded by a few people on the inside. The free'er flowing information, the better.
Makes sense to me.
Any traders or hedge fund guys want to opine a bit on this? Is this exciting news for you? Or did you just sort of shrug your shoulders and move on? Let me know in the comments.
I wonder when Eikon when will follow? The guys at Thomson-Reuters really don't have any original ideas.
Wow, Reed Hastings has really started something here.
Reed Hastings? What does Netflix have to do with this?
Basically forced the SEC's hand on making a decision about social media by releasing material information on his facebook account.
Ah, oh yeah that's right. Thanks for that.
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