By Sheila Dang
(Reuters) – What’s the value of being Twitter-famous? Two new stock indexes created by S&P Dow Jones Indices and Twitter will unravel the mystery on Thursday, measuring the performance of the buzziest companies for investors with an eye on social media influence.
Twitter has long played a central role for investors and traders to share stock tips, keep up with breaking company news and follow the latest musings from CEOs like Tesla’s Elon Musk, who recently polled his 64 million followers on whether he should sell 10% of his Tesla shares.
The S&P 500 Twitter Sentiment Index will measure the performance of the top 200 companies within the S&P 500 that have “the highest sentiment scores,” based on how the social network’s users are discussing the stocks, said S&P Dow Jones Indices.
The companies within the index will be weighted by market capitalization. A second index will measure the performance of the top 50 companies with equal weight.
The new indexes come as tweets about finance are rising on the San Francisco-based social media site, particularly with the growth of cryptocurrencies. Finance-related conversations were up more than 26% in 2020 from the previous year, Twitter said.
S&P DJI said it will measure the Twitter sentiment of S&P 500 companies on a daily basis by analyzing tweets that contain a “cashtag,” a stock ticker feature that works similarly to hashtags, and scoring whether the tweets are more positive or negative. Both indices will be rebalanced monthly.
Amazon.com Inc, JPMorgan Chase & Co and Meta Platforms Inc, the new name for Facebook, will be among the companies in the Twitter Sentiment Index, S&P DJI said, though it declined to provide the full list.
(Reporting by Sheila Dang in Dallas; Editing by Leslie Adler)