On Monday we saw a 21-word tweet from Hillary Clinton cost the biotech sector $40 billion in market cap in just one day.
The short message distributed over social media was obviously just more presidential campaign fodder, but it still caught major attention for the way it moved the market.
Here is the tweet, clearly a pre-planned stunt to get some campaign policy out to the masses:
Shortly after the message went out the overall biotech sector, tracked by the NASDAQ Biotech ETF shown below, started to tank.
At the end of the day, the sector as a whole lost 4.5%, or roughly $40 billion in market cap.
The message was targeted at a very specific instance of price gouging, where Turing Pharmaceuticals changed the cost of a recently acquired specialty drug from $13.50 to $750 per tablet. This story was actually first covered in the New York Times, however did not receive mass attention until Clinton disseminated over social media.
Small cap biotech stocks such as Aerie Pharmaceuticals, Immunogen, and Retrophin went down more than 10%. Even industry stalwarts such as Gilead, Biogen, and Amgen were also impacted several percentage points on a day when the overall market made moderate gains.
This event is just another example of the power that key influencers can have over the market – particularly when leveraging social media to get their message out.
There is no question than institutional investors and their algorithmic trading machines are factoring social media into their trading decisions. And that’s why I track the effect that social media message have on individual stocks, and the overall market, using my social media collective intelligence system.
Editor, Biotech Intel Trader