Twitter and S&P 500 join forces and create index to measure company performance

Conversations related to finance increased more than 26% in 2020. Tweets with ‘cashtags’ will now be analyzed to measure stock market expectations among the public.

What is the value of being famous on Twitter? Two new stock indices created by S&P Dow Jones Indices and Twitter will unravel the mystery on Thursday, measuring the performance of companies best known to investors with an eye on the influence of social media.

Twitter has long played a critical role in helping investors and traders share advice on stocks, keep up with company news, and follow the latest thoughts from CEOs like Elon Musk, who recently surveyed his 64 million. of followers on whether he should sell 10% of his Tesla shares.

The S&P 500 Twitter Sentiment Index will measure the performance of the top 200 companies within the S&P 500 with “the highest expectation scores,” based on how social media users are analyzing stocks, S&P Dow Jones Indices said.

Companies in the index will be weighted by market capitalization. A second index will measure the performance of the top 50 companies with equal weight.

The new indices come at a time when tweets about finance are on the rise on the San Francisco-based social network, especially with the growth of cryptocurrencies. Conversations related to finance increased more than 26% in 2020 from the previous year, Twitter said.

S&P DJI said it will measure Twitter expectations of S&P 500 companies on a daily basis, analyzing tweets that contain a “cashtag,” a stock symbol that works similarly to hashtags, and measures whether tweets are more positive or negative. .

Both indices will be rebalanced monthly. Inc, JPMorgan Chase & Co and Meta Platforms Inc, Facebook’s new name, will be among the companies on the Twitter Sentiment Index, S&P DJI said, though it declined to provide the full list.

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