8/17/12 Innovation Friday presentation. Given by Murali from H+K's digital team. Topic: Social Media and the Financial Markets.

1. The
Tweet
heard
round
the
Exchange
Social
Media
and
the
Financial
Markets
Innovation
Friday
August
17,
2012

2. The
Power
of
Social
Media
Commodity
Analyst
Phil
Flynn
of
Price
Futures
Group
notes,
“a
well-­‐placed
story
can
move
the
market.”
“Social
media
is
the
most
unverified
information
source
in
the
world
but
the
news
media
believes
it
because
of
its
need
for
speed,”
Italian
Journalist
Tommaso
De
Benedetti
said.

3. Crude
Oil
Futures
• A
person
claiming
to
be
Russian
interior
minister
Vladimir
Kolokoltsev
tweeted
at
9:59am
that
Syrian
President
Bashar
al
Assad
was
killed:
• The
three
tweets
garnered
over
1,000
retweets
in
minutes.

4. Crude
Oil
Futures
• Between
10:15
and
10:45am,
future
prices
for
West
Texas
Intermediate
rose
from
$90.82
to
$91.99
a
barrel
on
the
NY
Mercantile
Exchange.
• During
the
same
time,
Brent
crude
also
spiked
from
$108.10
to
$109.50.
• Once
it
was
realized
that
the
information
was
false
and
not
connected
to
the
Russian
Interior
Ministry,
the
price
of
WTI
settled
back.
• The
fake
tweets
were
eventually
revealed
to
be
the
work
of
Tommaso
De
Benedetti,
an
Italian
Journalist
who
aims
to
expose
the
unreliability
of
the
social
media
by
posting
fake
tweets
about
celebrity
deaths.
Informa(on
from
h+p://online.wsj.com/ar(cle/SB10000872396390444246904577573661207457898.html

5. Netflix
• After
the
market
closed
for
the
Independence
Day
holiday,
Netflix
CEO
Reed
Hastings
mentioned
in
a
Facebook
post
that
the
company
delivered
a
record
1
billion
streams
in
June.
“Congrats
to
Ted
Sarandos
and
his
amazing
licensing
team.
Netflix
monthly
viewing
exceeded
1
billion
for
the
first
time
in
June.
When
‘House
of
Card’
and
‘Arrested
Development’
debut,
we’ll
blow
these
records
away.
Keep
going
Ted,
we
need
even
more.”
• During
the
next
day
of
trading,
the
share
price
of
Netflix
jumped
13.4%
to
$81.72.
• Since
then,
the
stock
has
fallen
20%
-­‐
now
trading
at
$65.04.

6. What
does
this
say
about
Social
Media?
• Its
powerful
–
Beyond
reporting
the
news,
posts
on
social
media
have
the
power
to
move
financial
markets.
• It
can
be
unreliable
–
In
the
case
of
crude
oil
prices,
the
message
moved
so
quickly
that
there
was
no
time
to
substantiate
or
verify
the
news.
• It
can
magnify
messages
–
For
Netflix,
the
multiplication
power
of
a
Facebook
post
enabled
the
news
to
seem
more
positive
and
substantial
than
it
actually
was.
• It
will
be
increasingly
legislated
–
With
the
new
power
of
social
media,
courts
will
provide
laws
demanding
the
truthfulness
of
content.

7. Thank
You
For
more
information,
please
contact:
Murali
Digital
Chief
of
Staff
murali@hkstrategies.com