Does Sentiment About Facebook On Twitter Have An Effect On Stock Price?

By Justin Lafferty 

Facebook is getting lampooned all over the Web for its tumbling stock price. DCM Capital, which tracks social media sentiment, wanted to find out if there was any sort of link between the way people are dismissing Facebook on Twitter and the decline of the social network’s stock price. While there is a correlation, it’s a stretch to say that tweets drowned the stock.

As a way to drum up excitement for DCM Capital’s new mobile application, the company released an infographic, tracking public opinion of Facebook on Twitter (in red) in comparison with the social network’s stock price (in blue):

Click here to view the full infographic.

DCM notes in the infographic:

The results with regard to Facebook have been very interesting. We looked back at the historical sentiment on the company from May 18 to Aug. 17, a period just under 16 weeks, and there are some amazing facts. It’s clear that global Twitter sentiment on Facebook over the period was very negative, and there was a high correlation between sentiment and Facebook’s share price. If you’d have followed the sentiment trend and traded the stock accordingly, it’s possible you’d have done better than simply holding the stock.

Readers: Do you think Facebook’s stock will recover?

Images courtesy of DCM Capital.