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Does Being Popular on Twitter Help a Company's Stock? Wall Street Is Betting It Does

By: Mallika Mitra
Mallika Mitra, expert in Investing, Personal Finance, and Investing Editor at Money
Mallika Mitra
Investing Editor | Joined May 2020
Mallika Mitra is a reporter at Money covering money trends, investing and cryptocurrency. Her work has also appeared in Bloomberg News, CNBC and elsewhere.
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Published: Nov 19, 2021 4 min read

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Photo illustration of a Dow Jones graph with many Twitter birds chatting on top of the different chart peaks
Money; Getty Images

Wall Street is obsessed with what you're saying about companies on Twitter.

On Thursday, the S&P 500 Dow Jones Indices announced that it is launching the S&P 500 Twitter Sentiment Index Series in an attempt to gauge the public opinion of certain companies via online chatter. The two indices will use a scoring model to measure the sentiment of Tweets that have "$cashtags," the hashtags added to Tweets to reference certain stocks (like $AMZN for Amazon or $TSLA for Tesla).

The Tweets will be scored based on a database that determines the likelihood that particular words in a message are positive or negative. One index tracks the performance of the top 200 S&P 500 companies with the most positive sentiment on Twitter, while the other will measure the equal-weighted performance of the 50 companies with the most positive sentiment on Twitter. (An equal-weight index gives equal value to all stocks, no matter their size).