Following last months SEC authorization of social media as a means for market driven news, bankers, CEOS and hedge funds have become ubiquitous on social media sites like Facebook and Twitter. With the growing use of social media in alternative contexts comes much speculations on where the SEC should place more regulations in order to more closely manage the influences individuals using social media will have on highly significant political and economic situations. In last weeks hacking of the Associated Press, the public was able to see the powers of individuals on twitter and their possible influences on the market. Wall Street and high frequency traders use algorithms that will instantly pick up information by reading tweets. In the incident last week involving the hacking of the AP, these algorithms were able to pick up words like “Obama”, “”Bomb” and “Whitehouse”, resulting in a plummeting of stocks by 136 billion dollars.
Like it or not, social media is our future and I do not think it is right to follow the complaints that the SEC must place higher regulations on the use of social media in business and the economy. I think instead we must rely more highly on the social media sites themselves as well as the companies that use them to better control and organize the information that is put out, not organizations like the SEC. As Professor Kane explained in class, according to the Gartner Hype Cycle, following the negative hype of a particularly new technology, companies begin to improve the product and figure out how to better use the tools to benefit business. In this case, perhaps Wall Street will have to better regulate the algorithms they use that adjust the market according to posts on social media sites. In all, it is a working progress and like any new technology it will have failures, adjustments and complaints.. just like the internet.