Like it or not, Twitter will go down in history as the communications platform that epitomized a deeply polarizing Presidency.
A little less than two years ago, the death-knell for the then-140-character count broadcasting service was ringing loud, with claims that the likes of Snapchat and Reddit were already on the path to eating the little bird for lunch.
Fast forward to today, and Twitter is not only alive and chirping up a storm, it has become the soap-box of choice for instant communication globally, starting with the President of the United States.
Though often seen for its diverging extremes – as an outlet for both the darker side of politics as well as the lighter side of humanity – it is often overlooked that Twitter serves as a primary news source for millions of people.
With now 280 characters at anyone’s disposal, companies and individuals alike are using the service to instantly share information with millions – from breaking news to royal baby birth announcements to product announcements and quarterly earnings results.
Wall Street has been no exception. While the staid world of business, finance and capital markets had traditionally poo-pooed social media as something for the less-serious-minded masses, a growing number of public and private companies have been using Twitter to tweet their message.
“There’s been a dramatic shift in the information landscape,” says Ted Bailey, founder and CEO of New York-based Dataminr. “Information is getting on sources like Twitter early and in advance of what the Street is watching.”
Last year, Bloomberg added Twitter messages to its financial data delivery service – this includes tweets from Wall Street analysts, economists and U.S. government agencies. Investors, traders and fund managers are able to access and use the data to influence the buying and selling of stocks.
Though this information isn’t anything further from what one may find on a stock exchange platform, this takes away from the idea that Twitter is a mere expression of opinion. It also takes away from the notion that, like print, the web, radio and television, that Twitter can’t or shouldn’t be used to disseminate information.
Indeed, it is now entirely common for a company to post formal earnings releases and other important shareholder information on Twitter at the same time as they issue a release over the wires.
The simple truth is, the average retail investor is likely to see the tweet before they come across a more formal news story.
This new trend also serves smaller companies, who may not have a big enough name to draw the national news’ attention, in that it gives them the opportunity to share their message far and wide without relying on a press release getting picked up by media.
That said, as news travels fast on Twitter, companies also have to be weary, and more vigilant than ever before.
Famed entrepreneur Elon Musk landed himself in hot water over his use of Twitter last year, after tweeting that he had secured enough capital to take Tesla private, angering the SEC in the process. In short, he was accused of using his Twitter account to manipulate Tesla’s stock price.
His punishment? Musk lost his position as Chairman of Tesla’s board of directors for three years, was forced to pay $20 million in fines, and now has to secure approval from a lawyer before posting anything on Twitter that could be relevant to Tesla shareholders.
On top of all of that, he never did take Tesla private.
All of this is to show that, Twitter may in fact prove to be both a blessing and curse to modern companies. While it can serve as an efficient and cost-effective method for companies to share their news to a wider audience, the flip side is that negative news travels just as fast, and, as Mr. Musk showed last year, the repercussions can far exceed the reward.