How one tweet wiped $8bn off Twitter's value

[4k]

BBC is linkbaiting now?

One tweet didn't wipe $8bn off its value, the results did. If the results were released next day, it still would have lost value ffs. I feel angry reading through this and realizing it was a waste of time fluff.

Say what you will, its evident that HN crowd loves sensationalism more than content, as seen again and again.

[throwaway029]

Your comment is just as sensational as the headline.

I'll ask the same thing I asked someone else: You're saying if Twitter released their earnings as planned after closing that today after opening they would have still lost $8Bn? That is the relevant fact reported by BBC, and I highly doubt Twitter would have dropped by that much if investors slept on the news.

[stevetursi]

I think the point of the article is that disappointing earnings minus investor relations PR spin cost twitter much more than the normal scenario for bad earnings, which does include IR spin. And that nobody would have known about it, except for this tweet.

I don't know how much truth is in those two points, particularly the latter, but that's what the article is about.

[jscheel]

It's definitely sensationalist, but the fact remains, that single tweet represented prior knowledge causing a large, unexpected shift near the end of the trading day. Being unexpected, it seems to have triggered a fear-based selloff that may not have been as bad as if if the stock moved either direction after the earnings report.

[salmonellaeater]

The salient information:

Well, it seems that Nasdaq slipped up here after Twitter furnished the exchange with earnings details ahead of time ready for official publication.

...

Selerity then made sure that everyone knew about it through Twitter's own platform, but it did not break any rules in doing so as the results had already been published and were effectively in the public arena.

"We inadvertently released an early version of their [Twitter's] earnings," Nasdaq said.

[dvdcxn]

Does this open up NASDAQ to a potential lawsuit?

[pibefision]

Everyone critizes how Buzzfeed defines article's titles and here it is: BBC using the same tricks to get some extra trafic

[notahacker]

Nah... this is pretty standard headline writing. If anything, it's a relatively informative headline for a blog piece since it reveals both the magnitude of the stock price crash and how the revelation that brought it about was initially transmitted, which is the subject of the article. The headline-writing innovation popularised by Buzzfeed et al is the particularly nauseating habit of revealing absolutely nothing about the content of the article other than the emotions it's supposed to provoke, which usually turns out to be a gross exaggeration of the article's actual emotive pull.

This Man Read a Headline. What Happened Next Will Blow Your Mind

Most of the other 30 Tricks to Pull In Viewers used by Buzzfeed have been around for years, if not decades.

[untog]

Not quite, IMO. This headline actually contains all the relevant details - one tweet knocked $6bn off the value of Twitter.

The clickbait headline would be "You won't believe what this one tweet did to Twitter's stock", or "Twitter's stock lost $6bn in one day - the reason why will blow your mind"

[carlio]

The BBC has been going in this direction for a while. Note how most of the articles feature single-sentence paragraphs - turns out that's the easiest way to get people to stay involved. A lot of articles feature 6-7 images now too. The football(soccer) 'opinion pieces' are always about the top clubs and especially Man Utd, because that will get the most shares and readers. They're becoming as guilty as everyone else.

[binxbolling]

If Twitter knew this rough patch was coming (albeit not so soon), why did they remove the Discover and Activity tabs from their mobile app? Just anecdotally, I, and everyone I know, spent more time on Twitter because of those two features. Isn't driving more engagement and longer time-in-app tied to revenues? Financial considerations aside, why remove those?

[cma]

Or how about changes to the desktop site, where now clicking an image in a tweet actually makes it smaller most of the time. Gotta be one of the worst designs I've ever seen.

[untog]

My bet would be that your experience does not match with most users. They do base these decisions on analytics after all.

[josefresco]

Much of that functionality has been moved to "search". While I wasn't a big user of Discover and Activity, it seems global trends show on the default search screen.

[josebalius]

Totally agree, I have stopped using it as much since they removed those.

[venomsnake]

If a single tweet wipes $8 bn of your value - you are overvalued. Probably by an order of magnitude ...

[ifdefdebug]

I just don't understand that market. From the article: "(...) Twitter missing market analysts' revenue expectations of $456m by $20m (...)" - so one hour before, everybody was expecting $456m and held the stocks, now it's officially $430m and they get wiped like that? For less than 5%?

[hodgesmr]

The entire market is subject to the reactions of tweets.[1]

[1] http://www.washingtonpost.com/business/economy/market-quaver...

[anc84]

It's the insanity of the stock market where value means trust, not ownership or anything else "real world"-ish.

[Spooky23]

The issue was the early leak.

[bmelton]

How many people would divest themselves of Goldman Sachs stock if a reputable source tweeted something like "Sachs CEO arrested for fraud, ponzi-scheme charges."

For Sachs, $8 bn represents about 10% of their market cap. You don't think their stock would dip 10%?

[DangerousPie]

If Selerity was clever enough to short the stock before publishing this they probably made a nice chunk of change yesterday...

[deet]

I ran into someone from Selerity last night after this happened. I don't think they were able to do that, but he was still quite proud and happy regardless.

I wouldn't be surprised if the extra business they will get from the event might be worth more than a quick short in the long run.

[damon_c]

I don't know if clever is the right word for what they'd have to be to do that. I would guess though, that such a move would have been very obvious and easily discoverable by the relevant authorities no?

[shawabawa3]

Wouldn't that be extremely obvious insider trading? (which is illegal, right?)

[wdr1]

Mistakes like this are unfortunate, but once made, it's shocking that the SEC allows them to them to take the content down.

The wishful thinking that it "undoes" the error is understandable, but in reality that's not possible, and it really does is restrict access, give unfair access to information and effectively enables select parties to trade on insider information.

[heimatau]

So, I was following this accidental leak on reddit, someone made a really good comment. It goes as follows, regardless of the loss of market cap. Who would've thought that Twitter would be a viable two billion dollar company? Wow. They've achieved a lot. Props to them, even though they have a volatile stock.

[bhartzer]

$8b was wiped off of the value, but personally I think Twitter was over-valued in the first place. So maybe this brings it more into line with what it's really worth.

[perlgeek]

Clickbait title. Afaict it was the bad revenue numbers that made the stock fall, not the tweet that carried the news.

[throwaway029]

You're saying if Twitter/Nasdaq had released their earnings as originally planned after closing that they still would have lost $8Bn after opening?

[myth_buster]

So what was the technical reason for the gaffe? Was it just someone simply messing up effective from timestamp?

[untilHellbanned]

Not too familiar, is there any way NASDAQ could take a hit for this?

[btbuildem]

Good publicity for Selerity, anyways..

[laurentsabbah]

Shocked this headline isn't a sponsored post on my FB newsfeed with an image of the world ending and link to somebogusnewssite dot com