How to Profit from M&A Announcements on Twitter
Here is another example of how TweetTraders can help you profit from news released on Twitter.
On September 28, 2018 at 12:34 PM CT, Twitter user @Trading_mz tweeted breaking news that Bojangles Inc. (BOJA) was exploring a sale of the business.
The price of BOJA (Bojangles) shortly before this tweet was $13.80. Over the next four hours, it would increase nearly 14% to close $15.70. The gain continued through the end of the next trading day, where Bojangles closed up a total of almost 19% since the time of tweet.
Food chain acquisitions, or their possibility, are repeatable occurrences that a trader can catch via TweetTraders. Over the past 18 months, numerous public restaurant chains, similar to Bojangles, have announced that they are exploring a sale, causing an immediate increase in their stock price. For instance, when news broke that casual restaurant chain Bravo Brio (BBRG) had hired investment bankers to look into being acquired, its stock jumped by 10% that same day. Likewise, in April of 2017, Panera Bread (PNRA) spiked more than 10% on a rumor that they were interested in being acquired.
In most sectors, when a few companies sell, there tends to be a rush of similar companies that follow suit. A simple Google search will return dozens of publicly traded companies similar to Panera and Bravo Brio that offer fast and casual dining experiences.
The truth is, without more in-depth research, it’s impossible to tell which restaurant chains will end up looking for a sale. Luckily, that’s not a problem for TweetTraders, where you can list as many tickers as you want simply using the assumption that because company “x” is exploring a sale, it is likely that companies “y” and “z” may also pursue a sale.
Here is the simple step-by-step process using TweetTraders that could have caught the BOJA profit opportunity:
Step 1: Enter the tickers you want to track. In this case, I will use BOJA along with CMG and DPZ as companies I want to follow to check for M&A announcements.
Step 2: Enter any number of keywords you want to use to trigger alerts. In this case, I used the most common words used in press releases that announce potential M&A activity. You can use any combination of key words.
Step 3: Pick the type of alert you wish to receive.
Step 4: Receive alerts when one of your alerts gets triggered.
It was that simple to catch the BOJA announcement.
But TweetTraders also gives execution guidance.
As shown below, the next time an alert with this same combination of Twitter user/keywords is triggered, a user will receive information on how the stock (or coin) moved over 48 hours post-tweet to help determine the optimal trading strategy. It is up to the trader to understand the context and the value of the information source, as TweetTraders does not provide investment advice, but rather historical data on what traders may expect.
Example of Execution Guidance on Repeated Keyword Alerts. In this case there is only one tweet with those keywords to use as a data point.
That is just one simple flow of how TweetTraders can capitalize on real-time information on Twitter the instant it is born.
TweetTraders
Twitter is the source of real-time information, and TweetTraders is a platform that allows investors to profit from news the instant it is made available. Through our easy-to-use interface, users can quickly validate trading strategies related to how news can impact stocks or cryptocurrencies and set up real-time alerts for actionable insights that lead to profit. More importantly, with historical data down to the minute, TweetTraders improves trade execution by giving insight into when to buy or sell based on past trends.
Kernel
TweetTraders is powered by the Kernel platform. Kernel is a streaming data integration and rapid application development platform built by Ennate that allows you to make complex data-driven apps 10x faster. For more information on the power of our data connectors and lower-code application development process, visit ennate.io.
