Sentiment analysis: an information-gathering method of computations-or algorithm- used in dissecting the “opinion, sentiment, and subjectivity in text” in order to form a technical examination for filtering mass content.
The latest investment tool to be practiced involving sentiment analysis has been derived from social media outlets. The method reached momentum when a London- based investment boutique, Derwent Capital Markets, unveiled earlier this year a $40 million hedge fund that uses the contents from Twitter as a guide for its investment analyses. In fact, the company has restructured its entire business just to accommodate this practice; and re-launched in the Cayman Islands, no less. But nevertheless, as stated by The Atlantic in May, “The world’s first social media-based hedge fund will monitor a selection of tweets in real-time to feel out market sentiment before placing its bets.” (more…)
2011 became a stellar year for Twitter when the social media giant reached 100 million active users, thanks to the likes of such celebrity-drenched zingers of one Mr. Charlie Sheen, and to the (albeit brief) messages of peace from revered world leaders of Nelson Mandela and of the Pope. Also this same year, the San Francisco-based company, landed its 200 millionth account member on July 16; just two days before the fifth anniversary of its official launch into internet stardom. And while the majority of tweets are on current (world) events, sports, natural disasters, and entertainment, one other factoid that is grabbing attention are tweets on investments.
According to TechCrunch, at last count on October 17, 2011, there are on average 250 million tweets per day, and startup – hungry venture capitalists are scouring through the 140-character-max posts for hot investment tweets. Since initiation, Twitter Inc. is said to have cumulated “over $750 million in direct venture capital, from firms like Spark Capital, Union Square Ventures, Kleiner Perkins, Benchmark Capital, Institutional Venture Partners, T. Rowe Price (NASDAQ: TROW) and DST [Digital Sky Technology] Group,” courtesy of CNNMoney. (more…)