How appropriate Twitter might be for IR is a well-worn topic of debate, whether you side with those who say it offers a great online window for disclosure or the technophobes who consider it dangerous or – worse – a waste of time.
For traders, however, the microblogging platform is a gold mine of potentially useful information. ‘Twitter content is not really any different from other types of information, like news stories or blogs,’ says Ted Merz, global business manager for news and economics at Bloomberg. ‘It’s just that there’s vastly more of it, and information comes both from official first-party sources and other people discussing it.’
Such was the thinking behind last year’s deal between Bloomberg and Twitter, promising to provide terminal users with financial tweets and data, as well as sentiment analytics, to better inform their decisions. Though tweets have been integrated into Bloomberg’s market data desktop since 2013, this move sees important tweets picked out by the media company’s editorial staff and combined with social velocity numbers and real-time alerts.
Tweets will be filtered depending on how significant they are, Merz continues, using a combination of weighting algorithms and human curators. ‘There are a lot of factors at play, including how many people follow the account, how often he/she tweets and what about,’ he explains. ‘Then we use our editorial staff to essentially promote certain tweets into our clients’ feed.’
Merz believes it will make Twitter information that bit more accessible, not only because the microblogging site might normally be blocked but also because it has become part of his clients’ everyday workflow. It further allows companies to disclose more information without putting together a time and cost-heavy press release.
For IR teams, this means content shared on Twitter can now be a source of quality information rather than just a promotional tool. Merz adds that this move may ‘lower the friction’ of disclosing information on Twitter. ‘I think there will be an expectation that you can better inform your investors and the financial markets of changes in your firm, or milestones, new directions or new hires,’ he says.
Indeed, some of the world’s largest companies are already moving in this direction. Goldman Sachs announced in October 2015 that it would be sending out its earnings release only via Twitter and its IR website; JPMorgan did the same in January 2016. Though improved online security is said to be one contributing factor, Merz sees these moves as a step toward Twitter disclosure becoming the norm.
For now, though, these companies remain in the minority. A recent FTI Consulting survey finds that just 504 companies tweeted their results at all in 2015, and few of these disclosed exclusively on the platform. Though information shared on Twitter can be useful, it is not yet unmissable: as Joe Eichner,an associate at Greentarget Global Group puts it, Twitter is ‘an enabler, not the full package’.
The next step for Bloomberg, says Merz, is developing the suite of listening tools its terminals can offer, particularly for effectively monitoring the vast volume of information on Twitter. ‘Rather than scrolling through the entire feed, it would be more effective if these tools worked when, for example, there was a large volume of tweets about one company,’ he explains. ‘Things like that – mechanisms to analyze whether tweets are positive or negative, or whether they’re trending – are what we will be looking to build on.’
This article appeared in the Spring 2016 issue of IR Magazine
