How one tweet wiped $8bn off Twitter's value | Hacker News Reader

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

bbc.co.uk

70 pointsSimplyUseless56 comments

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.

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.

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.

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.

But the market cap is down another ~$1.3B this morning, as investors have had overnight to digest the news and price it in

It blows my mind that Twitter, a simple messaging service, still has a market cap of $26.31B after all this...

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.

Does this open up NASDAQ to a potential lawsuit?

The article didn't make the link between NASDAQ, NYSE, and Twitter clear.

The quarterly report was posted on twitter's own website (investor.twitterinc.com). Twitter would have had to prepare the report, and post it there. Twitter is listed on the NYSE, not NASDAQ...

Seems Twitter goofed more than anything...

> The article didn't make the link between NASDAQ, NYSE, and Twitter clear.

No, it did (well as far as NASDAQ and Twitter are concerned). Twitter was quoted as saying the following in the article: "Nasdaq hosts and manages our IR website, and we explicitly instructed them not to release our results until after the market close and only upon our specific instructions, which is consistent with prior quarters."

So it sounds like NASDAQ released this early on one of Twitter's websites.

Ah, I see that now.

In that case, I'm sure NASDAQ's contract with Twitter indemnifies them from anything like this.

investor.twitterinc.com is run by NASDAQ

This was my question as well; since the NASDAQ manage's Twitter's investor relations website and released these earnings I'd love to know what level of legal responsibility the NASDAQ would have to own up to if anything.

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

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.

To be fair, short paragraphs has been the BBC's style of online news for years. This story from 2005, for example:

http://news.bbc.co.uk/1/hi/business/4695495.stm

Edit: clarity

As long as the information communicated is good, then I'm all for a more attention-deficit-friendly format.

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.

> 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.

Furthermore, at least according to the BBC article, this tweet was responsible for the massive crash, in that the crash only happened after that tweet revealed the source (and investors panicked when they saw that the info came from a reputable source). That chain of causality may be up for debate, but the facts reported in the article at least support the headline.

The reason Buzzfeed & co. are so reprehensible is that the articles themselves often don't match the headlines they use[0]. I always feel cheated when I read one of those articles, because it's a bait-and-switch.

[0] It's not surprising that Buzzfeed headlines don't match the contents, since AFAIK they A/B test headlines and location (on the frontpage) obsessively. It's hard to optimize for both clicks and relevance when you generate headlines algorithmically, and it's pretty clear which one they care more about.

My favourite[1] example of this is Givemesport, which matches incredibly misleading linkbait headlines with URLs and on-page headlines that usually accurately summarise the actual content of the article.

Hence "Brendan Rodgers fires another warning to Mario Balotelli about his Liverpool future" goes to the following URL givemesport.com/569986-brendan-rodgers-mario-balotelli-is-doing-his-best-for-liverpool

and you can avoid having to read a lightweight article advertised as "This proves Chelsea will rule the Premier League for a long time" by noting it points to givemesport.com/569959-chelsea-stars-win-fa-youth-cup-for-second-time-in-a-row or "Barcelona star Lionel Messi did this after being insulted by fan by noting it goes to givemesport.com/569113-lionel-messi-smirks-after-espanyol-fan-insults-him

[1]OK, not my favourite; I blocked them from my Facebook feed

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"

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?

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

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

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.

Twitter images are totally broken, especially when people want to use them to convey text. There really needs to be a "view original size" that doesn't involve me using the DOM inspector.

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.

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

The issue was the early leak.

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

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

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%?

I really don't grok stockmarket even though I participate in it (mostly passively). As an almost outsider, it looks like a self-referential make-believe game. You are rewarded (or punished) for predicting not some objective aspect of reality but for what most others (aka "the market") believe/think/feel about the reality. It's very bizarre.

You can always buy and hold and get your dividends; there are plenty of "boring" companies where the valuation is much less speculative. The newsworthy companies like Twitter are the ones where it's much more uncertain; no-one knows what kind of dividends Twitter is likely to pay in the future. But that's not the majority of the market.

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

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%?

No one with a functioning brain would ... it is obvious by now that these guys are above the law ...

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

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

Nope, because the information was already publicly available, it's just that nobody else knew about it!

No, it's not insider trading if the information is publicly-available, which it was at the time.

That would be unlikely to constitute insider trading (which is less illegal than you might think). Selerity would not have been violating a duty of trust or confidence; whoever posted the earnings early may have violated such a duty but did not reap any material gain for doing so. So they'd probably be in the clear.

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?

Why? It was public information accidentally released by Nasdaq, right?

It would've been completely legal (and very smart) to do so.

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.

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.

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.

$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.

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

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

Perhaps not that much, but if the earnings were bad enough to justify such a response, a night to sleep on it may not have made much of a difference.

Are you saying the the big drop in the stock price was an overreaction? If yes, it'll rise again, and not as much harm was done as the article headline suggests.

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

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

Good publicity for Selerity, anyways..

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

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