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Comment by kyro | Hacker News Reader

Huh?

I went to the stocktwits site a few days ago after hearing about their acquisition of chart.ly. I could not figure out what they did. I get a cute live feed of people talking about stocks and... that's pretty much it. Who throws 800k at an app that is basically a much less aesthetically pleasing skin of search.twitter.com with the search fields essentially prepopulated? I told myself I wouldn't be so quick to judge too, but after spending about 10 minutes on the site, I left with nothing more than a stream of strangers' opinions and expletives regarding specific stocks , and my following of their twitter account without permission.

I'm looking for any and all enlightenment as to why this is worth 800k.

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I was cautious to come to the comments and offer my opinion, but I'm with you here, not only specifically regarding stocktwits, but this type of funding in general.

When I read that StockTwits uses WordPress which was also funded by their investors, I got visions of investing pyramid schemes. Fund a company that pays for and uses products from other companies you fund and do this over and over to build up the pyramid of investing.

I have to admit that I am not that savvy here, so perhaps that is why it doesn't make sense to me, but my personal anecdotal experience indicates that these types of investments are becoming more and more common and I am highly skeptical of their validity in the marketplace.

There is a lot of skepticism about whether or not Twitter can be monetized, so shouldn't there be even more difficulty monetizing a service built entirely on top of a difficult to monetize service? Are tweets going to have a little embedded ad from twitter and from stocktwits?

Plus, the investors are increasing their risk by investing in a company that uses a service that may itself cease to exist. The apparent trend in this kind of compounding risk from venture capitalists is not a good sign for the future in my view.

They will be selling user behaviour analytics, this is a gold mine for hedge funds. My startup would be first in line for that data too.

yeah right... amateurs sharing stock tips in < 140 characters. A hedge fund goldmine for sure...

I think you didn't get it, hedge funds will be stealing money from these amatures, by knowing what's on their minds. Crowds, if you can predict them (or direct them), you can be rich.

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