This report will be analysing Boeing’s stock for its major events since 2018 and the week commencing 22nd February 2021. Analysis will be done using StockGeist, a platform that determines the sentiment towards a stock in real-time, by applying natural language processing to the latest news updates and social media posts. All times given are in GMT+0.
The Boeing Company is an American multinational corporation that designs, manufactures, and sells aeroplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product support services.
Major Event Analysis:
Boeing has been facing many difficulties since the two 737 Max crashes in 2018 and 2019 which killed a total of 346 people. The company is also reported to have lied about the performance of the 737 Max, where business interests override engineering insights. On 7th January 2021, an article on The Verge and later followed by Bloomberg highlights Boeing’s misleading public-relations campaign, where the red flags and design flaws on the 737 Max were ignored. Boeing is fined $2.5bn due to this.
On 20th February 2021, one of the Boeings 777’s engine caught fire mid-flight – causes believe to be ‘metal fatigue’. The aeroplane was forced to do an emergency landing and is grounded for further inspection. Although, the engine was not manufactured by Boeing, it still directed the press and negative light toward the company.
When news on the new Covid variants and the extension of lockdown emerged, the company faced even more challenges and the hope for Boeing to recover soon is dimmed. Ultimately, these negative events are printed on Boeing’s share price. Below are a few examples:
7th January – 9th February: Reports of Boeing lying about 737 Max’s capabilities circulate
From the beginning to the latter stage of this circulation share price dropped from 212.95 on 8th January to 200.34 on 25th January 2021.
Data on informative and emotional messages not available
20th February: Boeing 777 engine caught fire
Immediately following the Boeing 777 engine accident, the share price fluctuates between 217 ~ 210 on 22nd February 2021. Although, it rebounded after, the outlook on Covid combined with the series of unfortunate accidents pushed prices down further to 207.56 as of 23rd February 2021, 6 PM GMT.
RED – where positive% < negative%
Through looking at the live data on informative and emotional messages ahead of the market opening time (14:30 GMT), it is understandable why Boeing’s stock dipped then rebounded on 22nd February 2021, following the news on the Boeing 777’s accident 2 days earlier.
4 hours prior to the market opening time, negative messages took an overwhelming majority of the informative and emotional messages – highlighted in red. This trend reversed as the day progressed, hence why the share price eventually increased again above to opening price.
Accuracy Test – 2021
This accuracy test will examine how Boeing’s stock price reacts with changes in emotional and informative messages on StockGeist. The week commencing 22nd February 2021 is the following week from the Boeing 777 engine damage mid-flight. The press picked up on this and the analysis below concluded that Boeing’s share price was affected by this accident.
Period: week commencing 22.02.2021
Time: 14:00 – 20:00
Through the accuracy test, it can be argued that Boeing’s stock is highly reactive to informative and emotional messages. However, the reactivity is much higher in informative messages than emotional messages. This is likely because Boeing’s operation and success are discrete – producing aeroplanes that fly with no accidents. Therefore, the measurement of Boeing’s performance and the future forecast is much simpler and less affected by human biases.
For positive informative messages, any moment that the positive messages take the majority results in 100% increase in share price for the day, regardless of size. The negative informative messages require needed to take on a much higher proportion to have the same impact – 0.75.
For positive emotional messages, responsiveness lowered to 33-50%. However, negative emotional messages managed to reach a 100% of certainty for falling stock prices if negative messages take the proportion of 0.75. This suggests that the stock price direction is more responsive in negative emotional messages than positive.
In terms of average price change, it can be seen that Boeing’s stock experiences a higher price increase in positive messages than price decrease in negative messages. This means that shareholders react more when the company is doing well.
Boeing’s operation in the last 3 years has definitely damaged its reputation, which is reflected in the stock market. However, the future of this company is depended upon two factors:
- The pandemic
- The aeroplanes
Airlines and aircraft manufacturers are one of the most heavily damaged institutions as a result of the pandemic. Boeing can produce reliable aeroplanes but could still fail if the pandemic lasts long enough. Although, new variants in COVID-19 proves to be a new challenge, success with the vaccine distribution and efficacy put lights at the end of the tunnel for Boeing. Arguably, the company will pick up momentum post pandemic when air travels return to normal.
Regarding aeroplanes and the efficacy of Boeing’s aircraft, this is an internal issue that relies on the ethics and values of the people that hold power in this company. Boeing’s decision to continue operation with the 737 Max despite the knowledge that the aircraft contains design flaws, alongside the recent Boeing 777 accident, all reflect the lack of attention and quality to Boeing’s aircraft. This is something that can change and remain uncertain for the time being.
In short, the world will eventually support air travel and aircraft manufacturers again, the real question is will Boeing be ready by then.
This report will be analysing Tesla’s stock for the week commencing 28th December 2020. This will be done using StockGeist, a platform that determines the sentiment towards a stock in real-time, by applying natural language processing to the latest news updates and social media posts. All times given are in GMT+0.
Tesla: an American electric vehicle and clean energy company based in Palo Alto, California. Tesla’s current products include electric cars, battery energy storage from home to grid-scale, solar panels and solar roof tiles, as well as other related products and services.
Analysis – Final Days of 2020
Its recent recognition in the media has motivated many day-traders to join the bandwagon throughout 2020. A noticeable achievement includes Tesla entering the S&P 500, which was announced on November 17. Being added to the S&P 500 or any other major indexes often create bullish pricing momentum. As expected, Tesla prices soared 46.3% in November. On the day of the announcement, Tesla stock shot up to 460 at 14:30 after closing at only 407 the previous day. Accompanied by its third-quarter results in October, the November rally for broader market and The Santa Claus Rally, Tesla share price continued to rise in the final days of 2020.
In the days leading up to New Year’s Eve, the media wrapped up 2020 for Tesla through numerous mentions about electric vehicles being the future. In addition, news on Tesla close to hitting 500,000 sales in 2020 further contributed to an increase in share prices despite speculation from bear investors. These activities are reflected in StockGeist’s informative message figures, which eventually explain how Tesla managed to start 2021 in a positive way while others are experiencing falling share prices.
On 30th December 2020, at 13:00 – 14:00, ahead of the US stock market opening time, the gradual increase in positive and neutral informative messages globally on Tesla forecasted a rise in its share price. Total informative messages increased from 133 at 13:00 to 335 at 14:00, the majority being positive and neutral messages. This trend continued throughout the day before peaking at 19:00 with 1064 informative messages, 82% were positive and neutral. Evidently, Tesla’s share prices shot up from 665.59 and peaked at 669.36 that day.
Similarly, the emotional messages displayed on StockGeist followed the same trend. On 30th December 2020 at 14:00, 150 emotional messages were recorded with 86% being positive and neutral. This number peaked at 19:00 where 80% of 772 messages were positive and neutral. The following day, the peak happened earlier at 16:00 where 74% of 838 messages were positive and neutral. These suggest that confidence was high for Tesla’s stocks, which further contributed to its increase in the final days of 2020.
The same theme continued through to the early days of 2021. This momentum allowed Tesla to push through the negative market at the start of January.
Accuracy Test – 2021
Period: week commencing 11.01.2021
Time: 15:00 – 20:00
For the opening days of 2021, share prices across most US industries fell. The Dow Jones fell as much as 2% and the majority of manufacturing firms lost up to 10%. However, Tesla stock shot up over 4% with the number of negative informative messages failing to exceed 30% for the first week of 2021. This is an explanation to why Tesla has been so successful in fighting against market pessimism. Through leveraging market sentiments through Twitter, YouTube, etc, Tesla is able to leverage a positive media outlook to keep its share prices rising.
However, as January progresses, negative sentiments on Tesla increased. The analysis below will focus on how share price moved with this change in sentiment.
The accuracy test shows that positive informative messages on Tesla outnumbered the positive emotional messages. At the same time, negative informative messages outnumbered negative emotional messages. Also, it can be observed that positive messages now occupy a smaller proportion of total messages, suggesting that the market is not reflecting positively on Tesla as it did last month.
In the week commencing January 11th, when there is a 10% increase in positive informative messages, there is a 38% chance of share price increasing. Similarly, a higher relative number of negative messages also resulted in a higher probability of stock price decreasing. The same concept also applies to emotional messages.
These messages give an explanation as to how Tesla was able to survive the opening days of 2021, where both consumer sentiments and the media were reflecting positive thoughts on Tesla’s stock during the final days of 2020, giving it momentum into the new year. However, as January progresses, the number of negative messages slowly took up more proportion of total messages, causing its share price to drop from 880.36 on January 8th to 840.82 on January 19th.
It is clear that informative and emotional messages have accurately predicted the direction of Tesla stock. As evidence, the falling Dow Jones and share prices across US markets at the start of 2021 are direct contrasts to Tesla’s direction. Although this is only a representation of the past week, future investors could refer back to examine consumer sentiments to direct their investment for Tesla, where informative and emotional messages have proven to be an accurate predictor of share price movements.
Tesla has received a lot of positive momentum in recent days. Therefore, looking forward, it is worth considering other StockGeist metrics like word clouds, fundamentals or ranking to get a better grip on Tesla’s direction when it is less stable.
With the current global climate, Tesla is currently standing strong at above 840 and is highly resilient to the negative forces in the market. The sales of its Model S are near 500,000 while revenue and share prices were increasing repeatedly throughout 2020. Concerns about its competitions like Apple or Audi in the electric-motor industry can only be tested through times. Other concerns about Tesla’s sales and product qualities are the same as they were before, and Tesla has repeatedly proven the bears and the industries wrong through its share prices. The release of the Cybertruck in 2021 will further reinforce Tesla’s standing in the market, giving Tesla’s investors higher confidence. Despite the recent increase in negative sentiments, the outlook for Tesla in 2021 would be more positive than negative.
This report will be analysing SOS Ltd’s stock for the week commencing 1st March 2021. This will be done using StockGeist, a platform that determines the sentiment towards a stock in real-time, by applying natural language processing to the latest news updates and social media posts. All times given are in GMT+0.
SOS Ltd, formerly China Rapid Finance Ltd, is a holding company based out of China with a focus on emergency services. Through its subsidiaries, SOS Ltd utilises blockchain and satellite communication to provide cloud computing and marketing services to several members of the emergency rescue market, including insurance companies, medical institutions, financial institutions and more.
Historical Analysis – 2020 and Early 2021
From the beginning of 2020, SOS Ltd saw a five-month-long bearish downtrend in their share price. This was likely caused by the company’s poor financial performance in the preceding year, with -$9.90 million in earnings (-85.12% change from 2018) and $37.66 million in revenue (-43.48% change from 2018), which were declared in December 2019. After a slightly bullish period that proceeded this downtrend, the value of SOS Ltd’s stock remained relatively stagnant for the remainder of 2020.
However, from the beginning of 2021 to mid-February, a surge of approximately 720% ($1.44 to $11.84) in share price was observed, owing to a few key catalysts. The sharp rise in the value of Bitcoin around this period was one such catalyst, largely due to the fact that SOS Ltd had announced the purchase of a large batch of crypto mining rigs in January. This purchase proved to be incredibly profitable for the firm very quickly, which attracted a large number of new investors. The rise in the value of Bitcoin also brought more positive attention to the future of blockchain technology – a technology that is greatly utilised by SOS in the provision of their services.
This spike in value, however, was quickly followed by a sharp downturn. One possible cause of this immediate reversal was SOS Ltd’s announcement in early February that it had entered into a securities purchase agreement with certain accredited investors to purchase $86 million worth of warrants that could be exercised for $7.00 to acquire American depositary shares of the company. As the share value reached new highs for over a year, speculators and retail investors instigated a selloff, which enticed other investors to exercise their warrants and sell their shares to ensure a profit on their part. This negative feedback cycle allowed for the value of the stock to fall around 50% in the space of only two weeks.
Brief technical analysis also shows that the value of the shares was relatively overvalued following this spike, as the relative strength index (RSI) reached highs of around 87, indicating the stock was in an overbought state. Additionally, the average true range (ATR) rose from 0.22 to 1.54 in a six-day timespan, indicating excessive volatility – this suggests a certain price level cannot be maintained, and may be one of the reasons, alongside the RSI value, why a selloff was initiated.
Recent Analysis – Week Commencing 1st March
SOS Ltd’s stock had a good start to the week commencing 1st March, opening 1.29 points above last month’s close. This bullish movement maintained its momentum for a few days up until 4th March, where a trend reversal was observed. Despite breaking the $6.50 support level, the value of the stock was able to recover slightly on the final trading day of the week, closing at $6.50 (a 7.26% overall increase).
Recent news combined with StockGeist’s sentiment data can provide some insight into these price movements. The 27% jump at open on 1st March strongly reflects pre-market sentiment, with informative messages being 50% positive and emotional messages being 38% positive (at 14:00). For the couple days that ensued, positive sentiment remained dominant, which allowed for the continuation of bullish momentum.
However, at 17:00 on 3rd March, Hagens Berman announced an investigation into a possible securities law violation (which StockGeist highlights as negative news). This investigation centres on the accuracy of SOS’s claims concerning its cryptocurrency mining assets and capabilities, and Hagens Berman encouraged SOS investors, who may have had valuable claims, to contact its attorneys. This inevitably drew a lot of attention to SOS on social media, as shown by the peak in the number of messages on StockGeist’s real-time sentiment tracker (18:00 on 3rd March). A spread of positive, neutral and negative sentiment around this time suggests that personal opinions were being presented on both sides of the legal case; it was likely this uncertainty caused recent gains in share value to be erased over the next few days. Pre-market data on 5thMarch showed 25-15% negative sentiment (a fall from the previous spread of negative messages surrounding the allegations), as many on social media started to believe that the previous claims were untrue, which allowed for the value of the stock to partially recover over the course of the day.
Accuracy Test – 1st March to 3rd March
StockGeist’s sentiment data was used to identify certain thresholds, calculated by finding the relative difference in the number of negative/positive messages compared to the largest of the other two categories. A percentage was then calculated to determine how often the value of the stock would increase/decrease under the specific threshold. The average price change for that threshold was also calculated, by subtracting the opening price from the closing price of an hourly period. For example, when there was 50% more (1.5x threshold) positive informative messages than negative or neutral messages, the price would increase by 0.11% on average; 50% of these price changes were positive (increases).
Results and Reflections
The accuracy test shows that a correlation exists between the number of positive/negative messages and the value of the stock. Emotional messages in particular show stronger correlation; for example, a threshold of 0.75x (25% fewer) negative emotional messages gave an average price decrease of 0.33% with 100% accuracy for this week of trading. This reflects the increasing evidence of social media’s relationship with the stock market. While the informative positive messages may not have been entirely accurate in determining increases in SOS Ltd’s share price, it is important to remember that this data works best alongside an additional set of information that is also provided by StockGeist, such as fundamental metrics and the world cloud.
Outlook and Conclusion
At present, SOS Ltd’s stock price continues to fluctuate, likely caused by the ongoing (and currently inconclusive) investigation by the SEC. SOS also plans to offer 23.88 million more warrants for the purchase of their American depositary shares, which is expected to cause their share value to decline as it did previously. StockGeist’s sentiment data and news highlights accurately reflected price movements following the company’s warrant offering in the first instance, which strongly suggests that data presented by StockGeist can act as a useful tool to predict further movements in these times of uncertainty for the company.
This report and analysis of SOS Ltd’s stock was performed to determine whether positive messages detected by StockGeist translated into an increase in stock price, and whether negative messages translated into a decrease in stock price in the week commencing 1st March. Please note that this analysis is not investment advice.
This report will be analysing Facebook’s stock for the week commencing 15th February 2021. This will be done using StockGeist, a platform that determines the sentiment towards a stock in real-time, by applying natural language processing to the latest news updates and social media posts. All times given are in GMT+0.
Facebook, Inc. (FB) is an American company known for its social networking platforms, founded in 2004 and headquartered in California, US. The company dominates social network popularity across the globe, with Facebook topping the rankings through its 2.74 billion monthly active users. Its other platforms WhatsApp (acquired in 2014), Facebook Messenger and Instagram (acquired in 2012) follow suit, ranking 3rd to 5th respectively. This enormous userbase facilitates Facebook’s advertising-based business model, generating 97.9% of its $85.9 billion revenue in 2020 from advertising. As a Big Tech company with a market capitalisation of $747 billion, Facebook is one of the biggest components of the S&P 100 and NASDAQ-100.
Historical Analysis: 2020 – Present
Performance in 2020: Facebook stock opened in 2020 at $206.75 and continued its bullish trend from the end of 2019, increasing 27.1% from October 3rd to January 29th, where it closed at $223.23. This peak would not be reached again for four months with the bullish trend ending as markets were disappointed by the results of Q4 2019 – as seen by the large gap in the candle sticks between January 29th and January 30th as the stock dropped 7.5% during after-hours trading. The stock was able to recover, up until this time last year, when Facebook’s stock fell by 31.3% from 19th February to 17th March as the spread of COVID-19 rattles markets and the wider economy, as exampled by the rapid rise in job losses to set record high levels of unemployment claims in the US – Facebook’s largest region by revenue. With a global recession looming, fears were that demand for Facebook’s core advertising services would plummet; a factor that contributed to Facebook’s underperformance compared to other technology companies in the S&P 500 from February to April.
Facebook’s stock resurged with the markets on 24th March as investors anticipated a stimulus package, further solidified as the $2.2 trillion economic stimulus bill was signed into law by the end of that week. Despite the previous fears of reduced advertising revenue, Facebook actually experienced a strong revenue increase of 16.7% across the first three quarters of 2020. This is because the lockdowns caused a large increase in the number of active users across its social network platforms and advertising demand was supported by new or expanding businesses during the pandemic. This further drove Facebook’s stock increase of 118% from 18th March to its new all-time high on 26th August of $304.67; the strong recovery overshadowing the negative shocks to the stock, such as Verizon and other companies pulling adverts from Facebook following a misinformation and hate speech controversy, causing a one-day drop of 8.32% on 26th June.
Following this strong recovery, Facebook stock was caught up in a broader pullback from its high, with an overall drop of 11.1% across September. Notably this was much larger than the overall drop of 3.9% for the S&P 500, as the sell-off was concentrated towards Big Tech stocks. With some larger deviations such as the spike across 4th-5th November in anticipation of the US election results, Facebook stock fluctuates around $273 for the remainder of 2020; a level that is still 20% higher than pre-COVID-19 levels, despite the pullback in September. This rough fluctuation around a mean level contrasts to the upwards trends for the S&P 500 in these final months of the year, with Facebook increasingly underperforming other technology companies throughout December. This weakness can be attributed to the numerous lawsuits, such being sued by the US Department of Justice for alleged discrimination in hiring practices, or two antitrust lawsuits from the US Federal Trade Commission. This is accompanied by the increasing regulation for Big Tech companies, with Australia unveiling new laws to gain compensation from Facebook for news publishers (which will be explored in the following weekly analysis), in addition to data privacy laws tightening from the EU and further restrictions expected under Biden.
Week commencing 15th February 2021: Following the market holiday for Washington’s birthday on Monday 15th February, Facebook opened stock opened the week on Tuesday with a 1.46% rise in the first half-hour from $270.54 to $274.13; a level roughly maintained through to Wednesday. On Thursday, this trend broke as the stock failed to recover from its drop in after-hours trading, closing the day 1.53% lower than previous. This was a result of Facebook’s protest to Australian legislation, which demands Big Tech companies including Google and Facebook to pay for reposted content from Australian publishing companies, where Facebook responded by blocking Australian users from viewing news content on its platform. Unfortunately, this had repercussions as a number of important, non-news pages were blocked; from a number of domestic charities to government COVID-19 public health pages, leading to the stock experiencing a bigger drop of 3.08% on Friday.
This fall is reflected in StockGeist’s sentiment data as negative data increases and positive data decreases by percentage (graphed above), with a sharper change on Friday matching the sharper drop in price. The negative response to essential pages being blocked can also be seen through the volume negative messages detected by StockGeist in the news and social media, with a respective 220% and 435% increase for informative and emotional messages from Wednesday to Friday.
Following the methodology from the Apple stock report, this analysis was performed to determine whether positive messages detected by StockGeist translated into an increase in stock price, and whether negative translated into a decrease in stock price; specifically for Facebook stock trading in the week commencing 15th February 2021. Please note that this analysis is not investment advice. Owing to the fact that most of the price increases for Facebook stock this week were relatively small, positive messages were not very accurate in this week for determining price increases. On the other hand, the negative messages displayed much higher levels of accuracy, reaching 100% in the 0.6x thresholds for both emotional and informative messages. While the thresholds were not indicative of the average price change for informative negative messages, as the threshold for emotional negative messages increased, so did the magnitude of price change. This sentiment data from StockGeist, particularly the emotional negative data, was therefore extremely useful tool to highlight falling prices in this week of trading.
Outlook and Conclusion
Facebook stock has since shown recovery, as it restores pages that were inadvertently blocked and strikes a deal with the Australian government to restore the unblock the remaining news pages, in return for a two-month mediation period for Facebook to strike commercial deals with Australian publishers. So far, there have been no clear trends for an overall rise or fall in Facebook stock price for 2021. One persistent factor has been Facebook stock’s underperformance in comparison to the S&P 500, which has risen 5.66% in 2021, while Facebook has declined by 1.17%. Technical analysis implies that Facebook is currently undervalued and should experience an increase in share price, however this is contrasted with the increasing regulatory scrutiny that will affect Facebook’s potential profitability, with the recent Australian case being one example of Facebook’s many ongoing battles against government regulation and lawsuits.
The worst-case scenario of a forced divesture of Instagram and WhatsApp is unlikely, and Facebook’s upside remains high with the projected growth in the digital advertising, alongside userbase expansion strategies, such as Facebook’s recently acquired stake of 9.9% in Jio Platforms to increase penetration into the Indian market. The launch of Diem (formerly Libra) is also expected in 2021 as Facebook’s move into cryptocurrency and the projected growth of the VR market will likely increase Facebook’s revenue via Oculus. While regulation may hinder the realisation of this upside, this analysis has indicated StockGeist as a useful tool in understanding the market sentiment in real-time, along with which direction the stock is likely to take.
Economics Undergraduate at University of Cambridge