Social Media And Investing
Goldman Sachs has taken an interesting way to gauge the valuation of a company and its stock — buzz on social media. Its analysts used comments to warn on Tesla and its Model 3 sedan. Here is how they did it:
“Goldman analysts looked to gauge sentiment on the Tesla TSLA, +0.63% Model 3 by analyzing daily social-media posts and categorizing Twitter and Reddit posts as positive, negative, or neutral. The buzz has skewed negatively recently, they said.
“They found that weekly posts about the Model 3 declined from an average of 3,900 a week last year to an average of 3,000 a week this year; posts with a positive skew have faded, they said.”
This is how PR measures public opinion to report back to clients. There is a caveat to this approach. It is not statistically accurate because the sample is most likely not random but it can provide a broad indication of trends. Tesla ought to be concerned.
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