Social Media for Market Driven News.. Too Much??

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. Image

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4 thoughts on “Social Media for Market Driven News.. Too Much??

  1. Oh my goodness! Impressive article dude! Thank you
    so much, However I am experiencing troubles with your RSS.

    I don’t know why I can’t subscribe to it. Is there anybody else having identical RSS problems?
    Anyone who knows the answer can you kindly respond? Thanx!
    !

  2. The ability of social media to drive the market up or down like that is incredible. I agree with the author of this article, the SEC needs to place higher regulations on social media. Especially since anyone can post anything on social media, its doubly important to be able to regulate it. On the flip side, the fact that anyone can post anything makes it that much tougher to regulate it. I forget what class I heard it in, but in general technology laws are about 10 years behind the times, and this seems to be no exception. Great article though, definitely something that needed to be addressed.

  3. Awesome post, Lawrence! I find it unsettling that social media has such a controlling power over not only havoc amongst people, but the stability of the market. I find it even scarier that anyone can affect it if they get onto an account that has a big enough of a following. These companies should have people tracking their social media accounts at all times. Also, could this be a way of people trying to control the market? This seems very dangerous, especially in todays society where social media already controls so much of what drives and directs us in everything we do.

  4. It’s so interesting that social media has so much power on the market. On the other hand, it’s just a form of communication, albeit an extremely fast type. You could also see social media as a form of quick marketing, so maybe everyone shouldn’t be so quick to believe everything that is broadcasted on it. In my personal opinion, I’m not entirely convinced that the SEC has the authority to regulate it.

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