Social Media Gains Wall St. Acceptance, Slowly
Traders and investors seem to have gotten past the ‘hash crash’.
In the April 25 incident, a hacker disseminated a false tweet via the Associated Press twitter account, reporting that bombs exploded in the White House and President Barack Obama was injured. Markets fell briefly before recovering, but a potentially greater and more lasting damage was to social media’s credibility and role as an information source for traders and investors.
The bad information highlighted the risks inherent in utilizing information reported in real time by comparatively little-known sources, but the medium is as robust as ever and social-media professionals and market observers say the incident won’t stop the train.
“The Twitter hack and the resulting impact on the stock market doesn’t suggest that we should fear social media, it suggests that we should fear good hackers,” said Vinny Jindal, chief executive of social-media platform Stockr. “The same impact would have occurred if they hacked CNN.com or any other major media channel.”
Jindal believes accepting social media as a reliable source of information will become a necessity. “Social media is an inevitable force,” he told Markets Media. “Though it may not be putting companies at risk right this second, by not embracing this new trend, in the near future they will find themselves at a significant disadvantage.”
The foundation of Stockr is a system to distribute content while allowing for users to be publishers and commenters at the same time. “It dissolves the line between publisher and reader,” Jindal told Markets Media. “Every user is equal and free to comment on various topics.”
“The two things that are mostly lacking from people’s investment experience are the lack of a wide network of people to refine investment ideas with, and the best available content about companies they are considering investing in,” added Jindal.
According to Jindal, Stockr offers the same features of an interactive social networking site, but without the anonymity that fosters dubious claims and allows for the dissemination of bad information on other online message boards.
“There is no social network online which provides authentic ideas about the stock market,” said Jindal. “We’ve all seen message boards with ranting claims by anonymous users, but by requiring users to link Stockr accounts to a Facebook or LinkedIn account, it proves authentication and leaves very little room for false information to be spread.”