Tweets and articles sent to Kodak stocks ahead of official government loan announcement
On Tuesday morning, the Wall Street Journal announced that Kodak would receive a US loan to produce pharmaceutical ingredients. The news, officially announced by the company and the Trump administration on Tuesday afternoon, more than tripled the value of the company’s shares.
But less than a day before the announcement, the title was already moving higher on a significant volume. More than 1.6 million Kodak shares were traded on Monday, a jump from an average daily volume of 231,000 shares per day over the previous 30 trading days. The stock price gained 25% that day.
The initial activity was suspect for some traders. It came long before the next day’s announcement. But some market watchers know why the Kodak stock moved early: tweets and reports from Kodak hometown TV stations in Rochester, NY Some of these tweets and reports were quickly deleted.
Shortly after noon Monday, two Rochester reporters tweeted about a Kodak initiative with the government in response to the coronavirus pandemic. One reporter has since deleted the tweet, the other has maintained it. The tweet that remains online has a timestamp of 12:05 am ET.
At around the same time, reports appeared on the websites of ABC and CBS affiliates in Rochester. The reports were originally published Monday after Kodak sent a media advisory about the initiative, according to Chuck Samuels, chief executive of the ABC subsidiary. The notice did not state that the information was not meant to be made public, he said.
A copy of it reviewed by the Wall Street Journal confirmed that there was no embargo period on the press advisory.
The CBS Affiliate Story was posted at 12:12 p.m. ET. In the now deleted article, a Kodak spokesperson reportedly said the initiative “could change the course of history for Rochester and the American people,” according to a copy of the article reviewed by the Wall Street Journal which was collected by Meltwater, a global media intelligence company.
Both stories were later removed from their respective websites after Kodak told stations the information was for “the background only” and not for publication.
A representative for the CBS affiliate declined to comment.
|KODK||EASTMAN KODAK CO.||8.76||-0.24||-2.67%|
A spokesperson for Kodak said the company sent the notice to reporters in Rochester on Monday morning. The spokesperson confirmed that the company asked reporters to remove the information after they published it.
Following the tweets and the news, activity in Kodak stocks has increased, according to trading data. In the hour from 12:30 p.m. to 1:30 p.m. ET on Monday, Kodak’s trading volume surged and its stock price rose from $ 2.22 to $ 2.41, a jump of more than 8% .
Kodak options trading also surged on Monday, hitting about 20 times normal levels, with a noticeable spike just before 1 p.m. ET, according to Henry Schwartz, founder of data provider Trade Alert. There was more than three times as much volume in Kodak calls, which can be used to place bullish bets on the company’s shares, than in bearish puts, he added.
Monday’s trading is only part of a larger move in Kodak shares.
This week alone, the company’s shares hit $ 60 per share at one point, up from around $ 2 last week. On Monday, the stock closed with a market cap of $ 114.6 million. This valuation exceeded $ 2 billion on Wednesday.
On Wednesday, Kodak shares closed at $ 33.20, their highest closing value since 2014.
This is a notable increase for a company that has struggled to reinvent itself since filing for bankruptcy in 2012. Changes in Kodak’s business model have already caused price spikes. In 2018, shares more than doubled after the company entered the world of digital currency with the intention of launching a first coin offering.
Monday’s stock market movement linked to the deleted tweets and news is one of the results of the increased scrutiny of the social media market. Many investment firms use computer algorithms to analyze information flows – including those from news, Twitter, and other social media – in order to make buy or sell decisions in fractions of a dollar. instant.
Other companies hire third-party companies to do this analysis for them. Companies like Dataminr look at dozens of variables on each tweet, such as user influence, geolocation from where the tweet is sent, and how tweets are grouped together. They then send alerts to their customers.
The technology has been around for several years, but it is increasingly used by hedge funds, investment banks, and even long-term investors such as mutual fund companies.
Meanwhile, stocks may also rise in value after being logged into online forums popular with individual investors using commission-free investing apps like Robinhood.
“As soon as a journalist shares news or an article is published online, social networks react very quickly. An article shared thousands of times on social networks is commonplace, and even if the content is deleted, the wrong can be done, ”said Meltwater. Managing Director Niklas de Besche.