081712 Innovation Friday

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

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081712 Innovation Friday

  1. 1. The  Tweet  heard  round  the  Exchange  Social  Media  and  the  Financial  Markets  Innovation  Friday  August  17,  2012  
  2. 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. 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. 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. 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. 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. 7. Thank  You  For  more  information,  please  contact:    Murali  Digital  Chief  of  Staff  murali@hkstrategies.com  

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