Did Social Media Chatter Predict the Moves in Riverbed and Tempur-Pedic?
Social Market Analytics looks at two stocks this week: Riverbed Techn (NASDAQ: RVBD), a maker of wide area computer-networking products, and Tempur-Pedic (NYSE: TPX), a manufacturer of mattresses and bedding products. During the week of April 16, both RVDB and TPX sold-off greater than 20%, becoming the biggest price decliners on their respective exchanges on April 20. Our Flash Report provides a daily estimate of market sentiment from social media sources and identified TPX and RVBD as the stocks with the most bearish market sentiment in the pre-market of April 20.
SMA's S-Score for RVBD provided leading indication of stock price movement in reaction to the company's report on April 19 that Q1 sales missed Wall Street's target. In the pre-market of April 20, RVBD' S-Score moved sharply lower to -4.19 (Extreme Negative) from the Neutral or Moderately Positive, levels observed during the prior 9 days. RVBD's S-Volume metrics moved sharply higher showing detection of increased social media activity for the stock. RVBD closed the day at $19.85, down 28.75%, reaching a seven month low.
The behavior of SMA's S-Score metric measures market trading sentiment and can provide actionable signals for upcoming price movement. On April 19, TPX reported a particularly weak outlook for 2012 raising concerns of slowing growth. On April 18, SMA's S-Score for TPX began a downward trend from moderately positive levels to -0.65 (Negative) on April 19, and then to -3.69 (Extreme Negative) in the pre-market of April 20. The movement was coincident with a massive spike up in TPX's S-Volume metric indicating unusually high social media commentary. Shares of TPX plummeted $17.22 to $66.53, a loss of 20.56%, to a level not seen since January 25.
Social Media data are noisy and complex. A single metric is insufficient to understand sentiment behavior over time. Our S-Factors are a family of metrics, including volatility, trend and volume measures, designed to provide a complete view of the social media signature for each security tracked in SMA's database. SMA's processing engine continuously updates our S-Factor metrics, capturing overnight and pre-market sentiment activities. Clients receive market sentiment reports prior to the US market open and on-demand throughout the day. We invite the reader to visit our website; investigate our market sentiment metrics for RVBD and TPX, other stocks, industry sectors, and market indices; participate in our FAQ forum; and sign up for our Flash Report and Newsletter.
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