Next Money: How StockTwits Changes Trading

Inside the Internet’s first financial-news network — a mashup of CNBC, the Bloomberg terminal, and the real-time Web.

Next Money: How StockTwits Changes Trading
Stock Exchange illustration


There’s an old saying on Wall Street: When you have something good, you’re not going to share it. “But you can’t develop good ideas without collaboration,” counters Howard Lindzon, CEO and cofounder of StockTwits, referring to the traders who use his social stock-picking site. “From 9:30 a.m. to 4 p.m., we’re all in the trenches together.” Lindzon’s 17-person team has spent more than a year building the Web’s most comprehensive — and accessible — virtual trading floor, letting users share ideas and data in real time without paying or registering (premium services deliver most of StockTwits’ revenue). The site, which attracts 300,000-plus unique visitors a month, has expanded to include its own news feed, user-generated charts, and Web TV channel. Here’s how it works.

1. Virtual Traders

Every day, the platform receives roughly 12,000 postings, half of which are tweets pulled in from Twitter (tagged with “$$,” or “$” preceding a ticker symbol). For example, Apple (AAPL), not surprisingly, bubbled to the top of StockTwits’ trending ticker list the first trading day after the company’s iPad debut.

2. News Junkies

StockTwits acquired the Techmeme-like news aggregator Abnormal Returns in January because it featured “the best, most-talked-about stories from the financial Web,” says curator Tadas Viskanta, who also writes big-picture commentary for the site. AR is now folded into StockTwits and includes the most clicked-on links from the StockTwits feed in real time.

3. Chart Toppers

The site also serves as a “Twitpic for financial data,” Lindzon says, hosting user-uploaded charts. In mid-February, users began posting technical analysis charts to predict when Clean Energy Fuels (CLNE) — a young and highly volatile stock — would surge. “Within three weeks, prices went from $17.50 to $22.50,” says Leigh Drogen, the site’s manager. “Everyone who invested made money.”

4. HotShots

StockTwits shares revenue with a handpicked group of expert traders who sell advice to its users. “I focus on what I’m good at: looking at markets and explaining them to people,” says Brian Shannon, founder of stock-analysis site and a 17-year trading vet. More than 400 subscribers pay $59.99 a month for Shannon’s weekly Webinars and daily market-recap videos.

5. Talking Heads

“It’s like CNBC but featuring real traders instead of celebrity anchors,” Lindzon says. Longtime investor Quint Tatro, whose public portfolio was up 17% in 2009, talks market trends with roughly 3,000 viewers on his thrice-weekly Web show (Tickerville Mid-Day View). It’s one of more than 15 original programs on “They’re available 24 hours a day,” says Lindzon, “so it keeps users engaged after market hours.”


Illustration by FRANK STOCKTON