Twitter Just Crushed Wall Street After The Cyprus Bailout

Twitter Just Crushed Wall Street After The Cyprus Bailout

Joe Weisenthal | Mar. 17, 2013, 3:32 PM | 20,602 | 24

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This process has been happening for a long time, but for those in finance, the value of Twitter is increasingly equaling or surpassing the value of traditional sell-side research from Wall Street analysts.

This weekend’s surprise bailout of Cyprus (surprise, because of the fact that depositors in Cypriot banks are seeing a ‘one-off’ tax) is a major moment in the evolution of financial information.

Because the news was so surprising, and because there’s so little time between when the bailout was announced early Saturday morning, and when trading begins Sunday evening, there’s been an aggressive thirst for information and analysis on what it all means.

But the sell-side has been fairly slow, and the Twittersphere has come to the rescue.

The man everyone is reading is the pseudonymous twitterer @pawelmorski, who has written two must-read posts already on the Cypriot bailout. The first is here, and the second is here.

In the second one he writes:

After a surprisingly long gap, the verdicts from the Investment Bank research departments are dripping in. In short if you can sell euros at Friday’s close you probably should (you can’t – pre-pre-market at 6pm London or 7am Auckland is about a percent off) but the tone is one of wariness rather than panic. The absence of Street research interest probably tells a bigger story than what they actually say. Only Barclaysbothered with the Sunday conference call, but we’ll probably get more chances to dial in and be told that the research houses don’t really know what’s going on. We can also enjoy the spectacle of people who right now couldn’t name him interpret the importance of the intervention of Archbishop Chrysostomos. Not for the first time, Twitter was ahead of expensive analysts in concern about deposit haircuts.

Among the few analysts who have put out stuff this weekend are SocGen’s Kit Juckes and Sebastien Galy, currency experts who both happen to be on Twitter, and are extremely plugged into the pace of demand for information.

In his latest email blast, SocGen’s Kit Juckes basically tells trader clients to go read blogs and tweets:

There are links to three (critical) analyses of the move below, from the FT’s Alphaville blog, from the Schumpeter blog in the Economist and from the ‘tweeter’ Pawelmorski. I think they are the three best summations of the response of market respondents over the weekend.

http://ftalphaville.ft.com/2013/03/16/1425732/a-stupid-idea-whose-time-had-come/  http://www.economist.com/blogs/schumpeter/2013/03/cyprus-bail-out   http://pawelmorski.wordpress.com/2013/03/16/cyprus-a-brutal-lesson-in-realpolitik-2/

That is pretty cool.

Other journalists noted the same thing, how fully Twitter dominated traditional research shops.

As for why it took so long to get reading material, another pseudonymous market pro basically just chalked it up to good old fashioned lack of knowledge on the subject.

And this is why Twitter is so killer.

In a very unusual crisis, the local knowledge was key. So it was essential to follow someone like Yiannis Mouzakis (to get the reaction from the Cyprus street) or Nick Malkouzis and Efthimia Efthimiou for the Greek perspective.

Bottom line: The value of Twitter (and Twitterers’ blogs) have been growing for some time.

But on a weekend, with a high degree of local knowledge and nuance required, the best information out there was all free.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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