As Twitter has become a more popular social media platform, its influence over the external world has been skyrocketing, especially when it comes to the investing space. In the past few years, we have seen markets react swiftly and sometimes violently to tweets sent out from powerful users – and sometimes to bogus users and bogus tweets. Below, we outline five of the most prominent tweets that had a marked impact on the ETF world [for more ETF news and analysis subscribe to our free newsletter].
1. Bill Gross Speculates on QE3
On June 22nd of 2011, Bill Gross sent out the following tweet from the PIMCO account, which currently has more than 139,000 followers:
“Next Jackson Hole in August will likely hint at QE3/interest rate caps”
The tweet went out at 10:23 EST, and the Dow Jones and the Dow Jones Industrial Average ETF (DIA, A-) were quick to react. After trending down that morning, the benchmark jumped nearly 40 points immediately following the message. The tweet was later removed from the account. The third round of quantitative easing would not be officially announced until late 2012.
2. Fake Russian Account Causes Quite a Scare
Unfortunately, Twitter is open to anyone who wishes to use it, whether or not they have sinister intentions. One Italian journalist created quite a fuss on August 6, 2012 when he created a fake Twitter account for the Russian minister of the interior Vladimir Kolokoltsev. The account released the following messages that day:
“ATTENTION. RUSSIAN AMBASSADOR IN DAMASCUS REPORTS THAT PRESIDENT OF ARAB REPUBLIC OF SYRIA BASHAR AL ASSAD HAS BEEN KILLED OR INJURED.”
“ACCORDING TO UNCONFIRMED REPORT FROM RUSSIAN DIPLOMATS IN DAMASCUS PRESIDENT ASSAD HAS BEEN KILLED TODAY.”
After some time, the account finally had this to say “This account is an hoax created by italian journalist Tomasso De Benedetti.” But the damage had been done. WTI and the United States Oil Fund (USO, A) soared on the day as crude oil jumped $1/barrel, a movement of 1.1% at the time. The tweets were eventually removed.
3. Doug Kass and the Apple Gaffe
Douglas Kass, a prominent hedge fund manager, caused quite a commotion when he made quite the speculative call on Apple (AAPL). On February 26th of 2013, Kass sent out the following tweet:
Apple’s stock jumped 1.2%, bringing with it some of the largest ETFs on the market, like the Technology Select Sector SPDR (XLK, A), the Technology Select Sector SPDR (IYW, A-) and the QQQ Fund (QQQ, B+). Apple, in fact, did not announce a stock split, much to the disappointment of shareholders and the Twitter world. Kass has since left Twitter and no longer uses his account that had nearly 65,000 followers.
4. The Associated Press Fiasco
Perhaps the most popular example of a market moving tweet came when the Associated Press’s account was hacked. On April 23rd of 2013, the AP accounted tweeted the following to more than 2 million followers:
The fake message sent the Dow plummeting more than 140 points while the S&P watched over $136 billion in market cap get erased in a matter of seconds. Shortly thereafter, it was discovered the tweet was a hoax and markets regained the ground they had lost. The whole incident was over in minutes, but it demonstrates just how powerful a simple 140 character message can be.
5. Carl Icahn’s $17 Billion Tweets
With two tweets and just 274 characters, Carl Icahn raised Apple’s stock as much 5% and gained $17 billion in market cap; that’s a value of just over $62 million per character. The tweets came in the afternoon of August 13, 2013, and were as follows:
After Apple’s stock soared, it brought with it a number of ETFs, as AAPL is the largest holding in products like SPY, DIA and QQQ, among many others. The tweet forced many to question whether or not this could be construed as market manipulation. Icahn held his position after the subsequent spike in stock price, but had he liquidated the SEC would have surely made his life a lot more difficult.
Still, as Twitter continues to expand, power users will continue to have the opportunity to move markets; it will be very interesting to see what actions, if any, regulators take in the coming years.
Follow me on Twitter @JaredCummans.
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Disclosure: No positions at time of writing.