Trading On Bad News On Social Media

When news broke of United Airlines staff physically removing a passenger from one of their flights in April, the share price plummeted by around 5% in a day. This is a fairly regular occurrence – some bad news surfaces on social media , and the company share price takes a hammering. But here’s the thing – in almost all cases, the effect is only temporary and there’s little or no long term damage done.

Just a few weeks later, United Airlines shares have quickly recovered, and it’s the same story with recent social media campaigns against Lego and Uber – a knee jerk fall followed by a quick return to the status quo. Even Volkswagen shares have been steadily climbing in value after  a social media and international news media drubbing that was about as bad as it gets following the emissions scandal.

So how can you make money out of this? Look for share price falls precipitated by online social media campaigns or publicity – and buy! The effect is unlikely to be long lived and you will, in all likelihood, make a quick profit.

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