On August 13 2013, billionaire investor Carl Icahn tweeted:
This was followed by another tweet shortly afterwards:
As of this morning, Carl Icahn's first tweet has received 2043 retweets and his second has received 916 retweets. These two tweets are important for a number of reasons:
1. Icahn chose to use Twitter to disseminate this information rather than leveraging the "traditional" media channels or newswires
2. Icahn's tweets received viral pick-up, seeing over 2,000 retweets on his first tweet and over 900 retweets for his second tweet regarding Apple. This means that this message had a potential reach of well over Icahn's 59,000+ twitter followers.
3. The markets responded instantly to this new information. The graph below is taken from Bloomberg and shows Apple (AAPL) on August 13th, when Carl Icahn's tweet was posted.
Apple's share price rose over 5% to $US494.66 reaching its highest point since January. Trading volume increased from approximately 200,000 shares trading hands to more than 829,000 shares.
The debate around social media's value in financial markets has been heating recently. Change creates new challenges and new rewards. While you can resist change, in the end you will be overcome by it. Carl Icahn is embracing new technology to get his message out faster and more effectively. The markets are affected by social media just as they are affected by traditional news sources. Social media is a powerful source of information.