We’ve tracked the use of social media sentiment data in the financial investment world for some time, and now European startup SNTMNT is bringing its take on the idea to 500,000 customers at online investment bank BinckBank.
As we’ve previously reported, SNTMNT analyses social media activity from financial analysts and consumers alike to gauge the current feeling around different stocks and predict how that may soon affect their prices. Until now, the company’s APIs have only been available to hedge funds and this is the startup’s first step into the retail investor sector.
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Aside from SNTMNT, we’ve previously looked at DCM Capital, which launched its own hedge fund that, based on academic research into the field, used social sentiment to make trading decisions. The fund was closed shortly after launch, with hostile market conditions at the time blamed, but the company went on to launch DCM Dealer, an online service allowing day traders to use social data as a factor in their decisions. The company recently auctioned itself off, with bids reaching just £120,000 ($182,000). We’ve contacted DCM to find out if it went ahead with the winning bid.
So, social sentiment as a reliable indicator in investment decisions is still unproven at a large, commercial scale but both SNTMNT and DCM have been keen to stress that it is just that – an indicator to be considered among other more traditional factors.
Amsterdam-based SNTMNT began life at a Startup Weekend event and raised €35,000 ($45,000) in seed funding last year from Dutch social media monitoring firm Clipit.
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