Behind the mysterious stock dump ahead of Trump's Lockheed Martin tweet
When it began pinging around on Twitter, the graph raised suspicion.
It showed the stock price of Lockheed Martin, an aerospace firm, jumping off a cliff only minutes before President-elect Donald Trump disparaged the company on Twitter.
Had Trump told people to dump their stock before he blasted Lockheed Martin's F-35 fighter jet program?
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It seems reasonable, looking at that chart. But there are several more likely reasons the stock started to plunge before Trump tapped out his tweet.
One of those reasons is Trump himself, as Business Insider pointed out. Late the night before, the president-elect attacked the same Lockheed Martin program on Fox News Sunday. The algorithms that trade huge amounts of stock every minute do so in part based on their ability to detect when social opinion is turning on a company, and the soon-to-be president of the United States blasting any company on television is surely not a good sign for that company's stock. Things that happen Sunday night tend to get picked up by news outlets the next morning, which was never going to be a good thing for Lockheed Martin.
Then there was another thing that happened around 24 minutes before Trump's 8:26 a.m. tweet on Monday, which was pointed out by both Business Insider and Fortune. At around 8 a.m. that day, various Twitter accounts started tweeting about the Zacks Investment Research downgrade of Lockheed Martin stock, something that was surely picked up by computers built to trade and sell off stock.
Soon after and still before Trump's take down tweet, Jim Cramer of CNBC's Mad Money remarked about Trump's Sunday night comments. This also gained traction on social media.
Algorithms factor in social media reaction to a company when deciding what to do with its stock, and considers when that stock has crossed a certain negative threshold. That line was likely crossed for Lockheed Martin sometime just before Trump's tweet causing the stock to tumble rapidly.
Although the tweet, to be sure, didn't help the company.
Topics Donald Trump
Colin is Mashable's US & World Reporter. He previously interned at Foreign Policy magazine and The American Prospect. Colin is a graduate from Columbia University Graduate School of Journalism. When he's not at Mashable, you can most likely find him eating or playing some kind of sport.
