The WallStreetBets forum on the Reddit Inc. website on a laptop computer arranged in Hastings-On-Hudson, New York, U.S., on Friday, Jan. 29, 2021. Photographer: Tiffany Hagler-Geard/Bloomberg via Getty Images
The race is on for hedge funds to better understand how social media is moving markets or risk the same fate as the short-sellers who were clobbered by the rally in GameStop shares.
One way to get ahead of these trends is to more closely track subreddits such as /WallStreetBets, which sparked off the recent buying frenzy and is keeping it rolling with a steady stream of messages telling members to "hold the line" on their investment.
But reading every Reddit post is a tough sell for a hedge fund or institutional investor engaged in high-speed, high-volume trading. That's why brothers Christopher and James Kardatzke, founders of Quiver Quantitative, are suddenly getting a lot of interest from Wall Street.
Over the past few days, the Wisconsin-based startup has gotten a steady stream of inquiries from hedge funds asking about how their technology can help them track social media.
"We've been getting a lot of emails from different hedge funds interested in using our data API to basically get data from /WallStreetBets," Christopher Kardatzke, the chief technology officer for Quiver Quantitative, told cheddar. "They want to make sure there isn't this retail investor interest in what they're taking short positions in."
The company, which provides both free and custom application programming interfaces (API), tracks or "scrapes" alternative data sources such as subreddits, Twitter, and Facebook channels — basically any non-financial source that could be relevant to markets.
Fortunately for the startup, it had been scraping the popular subreddit since early 2020.
Technically, that means it was tracking the number of times certain stocks or ticker symbols were mentioned and whether there was a positive or negative sentiment around those stocks.
Looking at the whole year, Quiver found that the "WallStreetBets Portfolio," a breakdown of the top stocks mentioned positively on the subreddit, was up more than 61 percent, was more volatile than the S&P 500, but outperformed it even through the downturn at the start of the year.
Right now, this data is aggregated on a daily basis, but the startup is working on rolling out a real-time feed within the next few weeks.
"It's pretty basic stuff, but we're in the process right now of expanding that into a live feed to get the most recent comments within seconds," the CTO said.
Kardatzke noted that this will be particularly useful to hedge funds, and will fit well with /WallStreetBets, which features daily posts outlining where members plan to invest the following day.
Soon, he added, Quiver will start looking at language more specific to the subreddit, including option trading terms such as puts and calls.
And while Quiver will likely develop some of these inquiries from hedge funds into client relationships, the company plans to maintain its free platform, which Kardatzke said was originally built to help retail rather than institutional investors.
"It's so relevant to retail investors," he said. "It's data you see in your everyday life. You don't need a finance degree to be able to analyze it or get insights from it."
Kardatzke said that he's conscious that the company could soon be straddling both sides of what appears to be a growing rift in the financial world. The way to remedy that is by making sure both sides are catered to. Retail investors, for instance, want more visualizations and analysis, while institutions want APIs to use for their own analysis, he said.
He said that typically data providers only offer the latter, "but we’d like to do everything we can to make insights from our data available to the public, while keeping afloat."
Adi Kunalic, President of Opendorse, joins Cheddar Reveals to discuss the first-ever association-wide deal in college athletics between Opendorse and the NAIA, and how Opendorse is marketing and educating student-athletes to make the most of their NIL deal potential.
Jason Chinnock, CEO of Ducati North America, discusses ways demand has changed over the last year and what supplying race bikes for the MotoE World Cup series means for Ducati's future.
The value of most cryptocurrencies have plummeted in recent months since reaching all-time highs in November, wiping out more than $1 trillion in value globally. The steep crash has some talking about the possibility of a crypto winter, a term referring to a prolonged bearish period where asset prices persistently fall over many months. This all comes as the Fed is expected to raise interest rates, and the Biden administration is working on an executive order to regulate Bitcoin and other assets. Josh Goodbody, COO of Qredo, joined Cheddar's Opening Bell to discuss the crypto crash, and how the industry might recover from it.
Logitech posted better-than-expected earnings in its third quarter, reporting sales of $1.63 billion dollars, down 2% from the year ago quarter, but well ahead of the Wall Street consensus of $1.48 billion dollars. The PC and gaming peripherals company also raised its annual guidance for both sales and profitability. Bracken Darrell, Logitech CEO, joined Cheddar to break down his reaction to the results, how the pandemic played a role in its growth, and where he wants to take the company next.
Starbucks is scheduled to report its fiscal first quarter 2022 earnings Tuesday, February 1 after the bell. The coffee giant is expected to report revenue of nearly $8 billion and earnings per share of 79 cents. Starbucks has seen a solid recovery in demand since the beginning of pandemic lockdowns, but is now facing a unionization push, labor shortage, and the Omicron variant. Thomas Hayes, chairman of Great Hill Capital, joined Cheddar's Opening Bell to give a preview of Starbucks earnings.
GM is scheduled to report its Q4 earnings after the bell on Tuesday February 1. Wall Street expects a miss as the automaker navigates the global chip shortage, which has hit car sales hard. Investors are looking for an update on production, as well as outlook for the electric vehicles that GM is investing billions to bring to market. Karl Brauer, executive analyst at iseecars.com, joined Cheddar to give a preview of the automaker's report.
Recent data reveals that streaming giants are struggling to retain subscribers in the months following a major release.
According to data from Antenna, subscriber trends show that users will subscribe to a given streaming service just to watch a particular show, and then cancel those subscriptions shortly after. This comes as the streaming space continues to heat up as new entrants crowd the space. Jon Christian, Founding Partner + Digital Supply Chain Leader at OnPrem joined Cheddar's Opening Bell to discuss.
As airlines continues to face massive pilot shortages, United Airlines is opening a training academy for future pilots. United projects that the academy will train around 5,000 new pilots by 2030. David Slotnick, Senior Aviation Business Reporter at The Points Guy joined Cheddar's Opening Bell to discuss.
Stocks opening mostly higher to close out a wild week on Wall Street. It comes as investors continue to digest comments from the Federal Reserve, as well as the latest slew of earnings. Gene Goldman, Chief Investment Officer at Cetera, joined Cheddar's Opening Bell to discuss.
Jim Lacamp, Senior VP of Investments at Morgan Stanley, recaps the headwinds markets faced over the last four weeks and what to expect from this month's Jobs report.
