Contrary to expectation, markets are very emotional places…and individual share prices are often influenced by sentiment as much as the fundamentals. Every IR and PR professional knows this and they know the power that 3rd parties like the financial press have to drive sentiment.
Many believe that social media can have a similar impact but there’s not been much hard data to support that view.
However as reported, our recent Social Media and the City study DID find some pretty interesting links between strong social media performance as measured by PRINT™ and positive share price movements.
The detail is in the study but, for the statistically challenged (like me) the scattergraph below shows the correlation between the PRINT™ Receptiveness score at the beginning of November and the monthly change in share price to 28 November. These were all statistically significant (r > 0.207, N = 100, p < 0.05). This effectively means that if one variable were to rise or fall, chances are that the other would too. The p bit means there is at least a 95% probability that this relationship is not happening by chance – a level at which studies in the social sciences are generally accepted to be true.
On the basis of these initial findings we think someone should fund a longer, more detailed study to determine whether or not this represents a real and consistent lead indicator.
We’re open to offers!