How One Tweet Wiped $8bn Off Twitter’s Value

A 40-second slip caused the market value of the social media Twitter to drop by as much as 25%. How is it possible that a tweet triggered its worst day since its flotation had in 2013?

In 2015, Twitter had one of the worst afternoons in its history. The social media was going to present results at the close of the market, but an alleged leak on its accounts led the company to register losses in the stock market that touched 25%, about 8,000 million dollars.

“Twitter planned to announce its accounts during the first quarter of the year after trading ended in New York. But someone decided to publish the results earlier, on the Nasdaq page, the stock exchange specialized in technology companies”, according to an article by BBC News. At first, no one noticed the mistake, but as soon as the market realized it, it harshly punished the microblogging network.

 

Who Posted The Tweet?

The Twitter account of Selerity, a company dedicated to investors that offers real-time information on the stock market, detected the information that was posted on the Nasdaq and published it. Moments later, the same account assured that it had not been a leak and posted the source from which they had obtained the information.

Before Twitter’s trading was suspended, the stock lost 6%. When they were reactivated, their value plunged another 19% before the day ended with a further 18% drop.

 

Whose Fault is It?

According to the BBC, it’s all due to a slip-up by Nasdaq, which ‘slipped up’ early on the information that Twitter had delivered just moments before it was ready for official release. And Nasdaq, for its part, blamed the error on a division called Shareholder.com, which provides investor relations services.

“The publication was caused by an operational issue that exposed the release on Twitter’s investor relations page for about 45 seconds,” Nasdaq apologized. “During these seconds, the site was picked up by a third party who publicly disseminated the information [about Selenity],” they added.

 

Was It Just Because of the Tweet?

One might think that if no one had posted the information on social media, no one would have known about it. But the truth is that the results of the technology company were disappointing, as they did not reach the revenues expected by analysts. The figures were so bad that even the CEO himself, Dick Costolo, said he was “disappointed” by the results. Besides, they had to reduce future revenue forecasts.

 

Twitter Explanations

As explained by Twitter’s director of investor relations, Krista Bessinger, the company asked the New York Stock Exchange to suspend listing “once we discovered that our first-quarter numbers were publicly known.”

“Selerity, which published the initial tweets with our results, informed us that the data was available on our page before the markets closed,” she assured, according to BBC News.

“Nasdaq runs our investor relations site and we explicitly instructed them not to publish them until the end of the day and only with our specific instructions, as in previous quarters,” said Bessinger, who explained that they will continue to investigate what exactly happened.