7/28/2019 The Joke Tweet That Cost Investors $25 Billion

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The joke tweet that cost investors $25 billion

Friday, July 05, 2013 . posted by Walter Adamson

The Reserve Bank of Australia announces changes to of f icial

interest rates on the f irst Tuesday of each month, and then

debriefs journalists and analysts the next day.

On July 3 an analyst tweeted a comment f rom a business lunch

where the Governor o f RBA was explaining their decision. This

tweet sent the Australian currency and stock markets into f reefall,

costing stock market investors alone $26 billion dollars and

costing sellers of the Australian Dollar roughly $1 billion. The

tragedy or  perhaps farce was that later the RBA clarif ied that the RBA Governor's comment was meant as

a low-key "joke".

The sharemarket and the AUD recovered a day later in response to t he RBA conf irming the comment was

not meant to be taken serious ly, but perhaps so me investo rs los t bo th ways?

The joke tweet that cost investors billions

The reaction on the currency market was instant , and reportedly f rom outside Australia. So who was

listening? Let's examine SocGen’s Kit Juckes' twitter account f or clues.

Who was listening to Kit Juckes' Twitt er?

7/28/2019 The Joke Tweet That Cost Investors $25 Billion

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He has nearly 3000 fo llowers, and has the prof ile of a "broadcaster"

rather than an "engager" because he follows less than 10% back inreturn. We can see that only 1.7% of his f ollowers are in Australia, with

28.9% in the US and 23.1% in the UK. The latter two were obviously

listening.

Mos t o f his followers are male - 88% - perhaps the makeup of the

f inancial trading community?

 And we can also see f rom the biographies of his Twitter f ollowers that

they have strong interests in f inancial trading. See the mos t common

descriptions that his followers use are "trader" "markets" "financial"

"views" and "economics".

They are the kind of people who would obvious ly

sit up and take not ice of currency commentary. And

in this case they did not just sit up, they acted!

If we check the authority of the f ollowers we f ind

that the average Autho rity is o nly 3.3 / 10. Only 1%

have an Authority of 9 or above. That 's not a great

result as it means that Kit Juckes f ollowers are

more listeners than experts in their own right.

See the gallery below for the chart of the followers' 

 Authority .

Who are the influential followers and where

 Although t he average f ollower Autho rity is only 3.3

there are among the f ollowers some with high

authority and very large numbers of f ollowers.

The @CMEGroup has 752,011 f ollowers, and

@MarketWatch has nearly as many. That's 1.5m

people that Kit Juckes can potent ially reach if these

two f ollowers re-tweet his original tweet.

Both o f these are accounts located in the US.

7/28/2019 The Joke Tweet That Cost Investors $25 Billion

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That's probably more than enough potential reach to set in train the trading activity we witnessed against

the AUD. Foreign investo rs would want to exchange their currency f unds and stock investments bef ore the

 AUD fell f urther. We can also deduce that these f ollowers know when to listen out f or Kit 's

"announcements".

They know when to listen for Kit's tweets

 Although we commented that Kit's account had t he prof ile of a "broadcas ter" we can also take a deeper 

dive to discover when in fact people do interact and engage with his messages by commenting or re-

tweeting. This analysis shows that this engagement happens on Tuesdays and Wednesdays, notcoincidentally the days o n which the Reserve Bank of Australia respectively announces it's rate decisions

and then explains them.

We can see the period on Tuesday mornings, and then Wednesday mornings and af ternoons is when

people engage most with Kit's information and that gives us a clue that they are probably listening for his

commentary on the RBA rate decisions at those t imes.

This helps explain how the reaction to the $25b Tweet was so fast.

Summary of the tweet which cost ASX invest ors $25b

The analysis shows us that although Kit Juckes is not a financial tweep celebrity or superstar with

hundreds of thousands of f ollowers that he was able to create a massive reaction because:

1. He has enough reach to t ouch a signif icant number of people;

2. He has some very Authoritative of f sho re followers with very large audiences (although they is less

than 1% of his f ollowers);

7/28/2019 The Joke Tweet That Cost Investors $25 Billion

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3. Those f ollowers know when engage with him, and they repeat his views on RBA decisions.

We should also not e that this near instantaneous - a whole new game which trading authorities around

the globe are now having to come to grips with in terms of market disclosure.

 Are you reaching the right audience in social media? Call us to ensure that you are.

*The ASX market cap f ell 1.9% on a value of $1.4 trillion, and currency trading in the AUD totals about $300

billion each day, and we assume 50:50 buy sell, and the AUD fell 0.65 cents or 0.709% f rom 0.916 post t he

tweet to 0.9095 immediately aft er the tweet which wiped that f rom $150 billion of sellers equity.

Thanks to Sally M Rose f or t he conversation which led to this analysis.

Walter Adamson

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