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Follow the Money: A Study of Cashtags on Twitter

Follow the Money: A Study of Cashtags on Twitter

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Published by Saladeprensa.org
The popularity of Twitter goes beyond trending topics, world events, memes, and popular hashtags. Recently a new way of sharing financial information is taking place in social media under the name of cashtags, stock ticker symbols that are prefixed with a dollar sign. In this paper we present an exploratory analysis of cashtags on Twitter. Specifically, we investigate how widespread cashtags are, what stock symbols are tweeted more often, and which users tweet about cashtags in general. We analyze relationships among cashtags and study hashtags in the context of cashtags. Finally, we compare tweet performance to stock market performance. We conclude that cashtags, in particular in combination with other cashtags or hashtags, can be very useful for analyzing financial information and provide new insights into stocks and companies.
The popularity of Twitter goes beyond trending topics, world events, memes, and popular hashtags. Recently a new way of sharing financial information is taking place in social media under the name of cashtags, stock ticker symbols that are prefixed with a dollar sign. In this paper we present an exploratory analysis of cashtags on Twitter. Specifically, we investigate how widespread cashtags are, what stock symbols are tweeted more often, and which users tweet about cashtags in general. We analyze relationships among cashtags and study hashtags in the context of cashtags. Finally, we compare tweet performance to stock market performance. We conclude that cashtags, in particular in combination with other cashtags or hashtags, can be very useful for analyzing financial information and provide new insights into stocks and companies.

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15/08/14 19:51HentschelPágina 1 de 19http://firstmonday.org/ojs/index.php/fm/rt/printerFriendly/5385/4109
First Monday, Volume 19, Number 8 - 4 August 2014
The popularity of Twitter goes beyond trending topics, world events, memes, and popular hashtags.Recently a new way of sharing financial information is taking place in social media under the name of 
cashtags
, stock ticker symbols that are prefixed with a dollar sign. In this paper we present an exploratoryanalysis of cashtags on Twitter. Specifically, we investigate how widespread cashtags are, what stocksymbols are tweeted more often, and which users tweet about cashtags in general. We analyze relationshipsamong cashtags and study hashtags in the context of cashtags. Finally, we compare tweet performance tostock market performance. We conclude that cashtags, in particular in combination with other cashtags orhashtags, can be very useful for analyzing financial information and provide new insights into stocks andcompanies.
Contents
IntroductionRelated workDatasetCashtag usage on TwitterCashtag–tweeting Twitter usersCashtag relationshipsTweet performance vs. market performanceConclusions 
Introduction
The increased popularity of Twitter as one of the most important sources of real–time information on theInternet makes it a great platform to broadcast time–sensitive information. While users tweet about a widerange of topics and events, certain writing styles like hashtags are now well understood as a topical markeror context. Similarly, the use of cashtags is growing as a mechanism to denote a financial theme in a tweet. 
Figure 1:
 Screenshot of a tweet with cashtag $MSFT.
 
15/08/14 19:51HentschelPágina 2 de 19http://firstmonday.org/ojs/index.php/fm/rt/printerFriendly/5385/4109
 Cashtags are stock ticker symbols that are prefixed with a dollar sign. For example, to tweet about Microsoftstock, you would use $MSFT; for Apple and Google, you would use $AAPL and $GOOG. Figure 1 shows anexample of a tweet with the cashtag $MSFT. Following the same strategy as with hashtags, Twitter madecashtags clickable in July 2012. A click on a cashtag results in a search for tweets containing this cashtag.Cashtags, however, have been used before Twitter created this feature, mainly driven by third–partyservices like StockTwits (http://stocktwits.com).In this study, we explore in more detail cashtags as a way of communicating financial information in Twitter.In contrast to previous work, we are not interested in stock market prediction or modeling stock behaviorbased on sentiment. Our goal is to understand the main characteristics of cashtags and provide insights intostock market data on Twitter.In particular, we study the following properties of cashtags in this paper:1. The distribution of cashtags on Twitter, most–mentioned companies and business sectors.2. The characteristics of users tweeting about cashtags.3. The relationship between cashtags and between cashtags and hashtags.4. The connection of tweet performance and market performance. 
Related work
Existing research explores financial data on Twitter to predict the stock market. Typically, this work focuseson extracting sentiment from tweets and using these to predict trading volume (Bordino,
et al.
, 2014), stockmarket returns (Loughlin and Harnisch, 2013; Zhang and Skiena, 2010; Bollen,
et al.
, 2011), and volatility(Oliveira,
et al.
, 2013). Bar–Haim,
et al.
 (2011) identify expert investors and develop a trading strategybased on user expertise. TweetTrader.net is a research project where users explicitly annotate tweets withsentiment in a game–like environment (Sprenger, 2011). All of this work revolves around extractingfinancial information from Twitter, while only few mention the term cashtag explicitly (Oliveira,
et al.
, 2013;Bar–Haim,
et al.
, 2011; Sprenger, 2011). To the best of our knowledge, there exists no prior work aboutthe properties of cashtags themselves.Spam detection is necessary to filter tweets sent by spammers. There is a large body of work on spamdetection on Twitter. Yardi,
et al.
 (2010) were among to first to study spam on Twitter specifically. In theirstudy, the authors examine features for spam detection such as user age, tweet frequency, friend–followerratio, and user clusters. Follow–up work studies features such as text content and timing of posts (Chu,
et al.
, 2010), network distance and connectivity (Song,
et al.
, 2011), keywords and URLs (McCord and Chuah,2011), message similarity and friend name similarity (Stringhini,
et al.
, 2010), and image content (Jin,
et al.
, 2011) to discriminate spammers from regular users. All of this work can be used to detect and filterspam tweets and spam users before analyzing financial data on Twitter. 
Dataset
The dataset used in our study consists of all public tweets in English language from April 2013 which containat least one cashtag referring to a stock listed on NASDAQ or the New York Stock Exchange (NYSE). Weaccess the data via the Twitter firehose, which allows a connection to the entire set of tweets. Another wayto access tweets with cashtags is to use Twitter’s Search API and searching for a disjunction of individualcashtags. However, not all tweets are indexed and returned by the Search API (see https://dev.twitter.comfor further documentation). We filtered tweets using a proprietary spam filtering mechanism that is similarto the techniques described in related work.In April 2013, there were 2,691 different stock symbols (companies) listed at NASDAQ and 3,263 stocksymbols listed at the NYSE. The list of stock symbols of both stock exchanges was downloaded fromhttp://www.nasdaq.com. In addition, these lists contain a mapping from stock symbol to company name aswell as a classification of these companies into business sectors (
e.g.
, technology or finance).In the last section of this study we compare tweet performance to stock market performance. Stock marketdata (
i.e.
, the closing price in U.S. dollars per stock) was downloaded from MSN Money at
 
15/08/14 19:51HentschelPágina 3 de 19http://firstmonday.org/ojs/index.php/fm/rt/printerFriendly/5385/4109
http://money.msn.com. 
Cashtag usage on Twitter
In this section we analyze basic properties of cashtags on Twitter. First, we look at the distribution of tweetswith cashtags on Twitter. Second, we analyze the coverage of stock symbols. Third, we report on the topcashtags used in tweets. And finally, we calculate a ranking of business sectors.
Distribution of cashtag tweets
First, we study the distribution of tweets with cashtags on Twitter. The following table contains the totalnumber of tweets with cashtags from NASDAQ and the NYSE in April 2013 and an approximation of the ratioof cashtags tweets vs. all tweets. This approximation was calculated using a one percent sample of cashtagtweets and comparing it to a one percent sample of all tweets in English of the respective months. Forcomparison, we list the number of cashtag tweets and ratio of all tweets for the months of April 2012 andApril 2011. 
Table 1:
 Distribution of tweets with cashtags on Twitter. We make the following observations from Table 1:1. The absolute number of cashtag tweets increased over the last years. That can be explained with thegrowth of Twitter in general.2. The ratio of tweets that contain cashtags remained fairly constant over the years. Only 0.012 percentof all tweets in English (every 8000th tweet) contain a stock symbol from NASDAQ or NYSE. Eventhough Twitter made cashtags clickable in July 2012, the fraction of tweets that contain stocksymbols did not increase.
Coverage of stock symbols
In April 2013, 2,658 different NASDAQ stocks were mentioned via cashtags on Twitter. That is a coverage of 98.8 percent of all NASDAQ stocks. Similarly, 2,680 different NYSE stocks were mentioned via cashtags,which is a coverage of 82.1 percent. 

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