Content provided by Case Eichenberger, CLS Internal Wholesaler
As a Millennial, I am constantly using social media. When I was in college, not too long ago, Facebook was just getting started and was being pushed to other schools outside the first social network of Harvard University. Twitter has since followed, allowing people to “tweet” their thoughts to their followers. Twitter makes it so you can follow any profile/person/company that has an account. I am an avid user of both, and find that lately I have become accustomed to getting most of my news from social media sites. I like to follow several sports writers and our local University of Nebraska sports pages. It is a way for me to get news up to the minute from a person that is at a particular event, or interviewing a particular person for a story. As they are listening or watching they are live tweeting what is going on; and if you follow them, you are getting that information real-time. In fact, as I am looking through my twitter feed right now, and am getting up to date scores and play by play of the Nebraska baseball game as if I was there!
Like it or not, we live in an age where news happens fast, and most of the time it seems it doesn’t matter if you get the story right, it matters if you get it first. If you happened to be following @AP this week you may have noticed a startling tweet. “Breaking: Two Explosions in the White House and Barack Obama is injured.”
Now imagine you see this real time as it comes across. You may first be struck with fear for our nation and President. Then think of how this would, or could, impact markets. As we become a nation focused on being the first to a story and getting it out to the public as quick as possible, you may come to understand how the Dow fell close to 150 points almost instantly in a sell-off after this tweet got out. Of course, this tweet was false and in a few moments the Dow had rallied back into positive territory. This all happened within 5 minutes of the tweet appearing. Within a week of the act of terrorism that hit Boston, another type hit the web. The Syrian Electronic Army claimed responsibility for the AP hack, and previous ones on Reuters, CBS and the BBC. All these types of hackers need is the user-id and password of someone authorized to push tweets out to followers, and there are several online forums to gather this information.
I believe that this brings up a bigger issue. In 2008 the SEC began to provide guidance for websites and blogs, and with this came social media as well. Any organization that uses social media can become a target for hackers and cyber terrorists. Every major media outlet does have a twitter account as a way to deliver their breaking stories as quick as possible. As our world becomes more connected to social websites like Facebook and Twitter, we may start to see more instances of hacking in the future to scare people, or even potentially to affect the stock markets. I think it would be interesting to see if there was a great number of “short sales” that came before that tweet and the market dropped. People could start to use this illegal hacking activity as a way to manipulate markets in their favor to drive up a price, or sell on a panic.
Some words of wisdom from an avid social network-er: please remember to always double check your sources before acting on a storyline in today’s age of social media and 24 hour news cycles, and keep your tweets 140 characters or less!