Kings of the Cashtag - Analysing cashtags using a social media monitoring tool
In the 24 hour world of international stock markets, share prices are in constant flux, rising and falling with every announcement, product launch and breaking news item. For investors and investor relations professionals everywhere, keeping track of such fast moving and constantly fluctuating information was probably hard enough before the advent of social media. But now with the worldwide usage of social media sites such as Twitter, each piece of price sensitive news is amplified and almost instantaneously transmitted around the world. So how can IR professionals keep track of everything that is being said about a company’s stock? One thing that might help is to analyse a company’s cashtag using a social media monitoring tool.
Although hashtags are now firmly entrenched in most people’s online vocabulary, the hashtag’s financial cousin - the cashtag - is also beginning to see wider use ever since its introduction to Twitter in 2012. Created by using the dollar sign ($) and a company’s stock ticker symbol (e.g. $AAPL is Apple’s cashtag) cashtags are a method of highlighting Twitter conversations that relate to a particular company’s stock.
Talkwalker conducted a wide-ranging analysis of the cashtags (mainly monitoring Twitter) for an extensive selection of global titans and Fortune 500 companies over one month from September 21st to October 20th to take a deeper look at how, when and where cashtags were being used and to determine which companies are the true kings of the cashtag. Talkwalker’s analysis showed that cashtags are used most often when discussing stocks in the technology and finance industries.
Monitoring Twitter: Kings of the Cashtag
The chart above shows that although tech giants such as Google, Microsoft and Apple tended to dominate, financial institutions are also represented with Bank of America and JP Morgan making an appearance. The leader, by some distance, is Apple with 33.1% of the share of topics, a higher ratio than the next five companies combined. Apple’s cashtag also performs well in terms of engagement where it once again leads the pack followed by Microsoft ($MSFT) and Oracle ($ORCL).
Global Cashtag Usage on Twitter
North American tweeters are the most likely to use a cashtag by a factor of 3:1 when compared to their European counterparts and as the share of topics chart showed, every company represented in the chart is based in the US. The stocks that are being discussed using cashtags are broadly the same on both sides of the Atlantic.
When it all goes wrong: Walmart
Having a cashtag mentioned on Twitter is not always a positive sign however. Though analysis of cashtag sentiment shows that it is most often used in a neutral manner, bad news tends to be publicized more widely and shared more extensively. One example of a company that has seen its cashtag used in a negative way is Walmart. Sentiment analysis of Walmart’s $WMT cashtag clocked negative sentiment at around 34.3% with positive sentiment at just 10.2%. This negativity appears to have been triggered by Walmart’s plans to cut health insurance coverage for certain employees.
Twitter Analytics: From Cashtag to Hashtag
A look at the top trending themes surrounding Apple’s cashtag also gives an insight into the hashtags that Apple’s IR team may want to be keeping an eye on.
Unsurprisingly #stocks is the hashtag most closely linked to $AAPL, but of more concern may be the appearance of #Bendgate, a reference to the claims made by some that Apple’s new iPhone 6 had a tendency to bend. #MarketManipulation may also need to be tracked as this refers to allegations that Apple tried to manipulate markets to their advantage. For Apple’s IR team, following such discussions on social media could be key, as these conversations can have a significant short term impact on stock price and may require action in terms of communication and/or product design to avoid long term damage.
Insight into investor sentiment on social media
Cashtag analysis can also provide insight into investor sentiment ahead of important financial events such as earnings announcements. Bank of America ($BAC) and JP Morgan’s ($JPM) recent earnings conferences were both vigorously followed and discussed on social media and through analysing investor sentiment using their cashtags before the earnings announcement, sentiment on social media suggested that the stocks would out-perform expectation. As it turned out, this sentiment proved to accurately reflect what happened after the announcements were made.
Although cashtags are unlikely to ever be as widely used as hashtags, analysing the extent of their use and the context in which they are used can provide potentially important insight to investors and investor relations professionals alike. A strong understanding of how, when and where cashtags are used can help when navigating treacherous social media waters and stop you and your team from drowning in oceans of unruly news and information.
For more information on using social media and social media monitoring for your investor relations How to Reach Investor Relations Excellence using Social Media Intelligence is a comprehensive guide to developing a strong strategy in this area.