Looking at Social Media Chatter Surrounding Priceline

This week, Social Market Analytics (SMA) looks at Priceline.com Incorporated PCLN, the operator of an online travel company offering its customers retail airline tickets, hotel room reservations, and rental car services.  On August 8, Priceline established disappointing guidance for its third quarter profit outlook, estimating earnings per share of $11.10 to $12.10, a decline from its earlier forecast of $12.82 per share.  The company is viewed as being caught up, along with other online travel companies, in an industry wide slowdown in travel bookings driven by Europe’s deteriorating economic condition.  Shares in Priceline experienced a sharp decline as analysts reduced price targets for the stock but maintained ratings levels.  During the week, Priceline appeared on SMA’s morning Flash Report, which identifies stocks, in the pre-market, with extreme sentiment levels that are likely to trade with high activity during the upcoming session.  On the morning of August 8, our analytics engine identified Priceline as one of two stocks with extreme negative sentiment from the universe of stocks tracked by SMA.  SMA’s sentiment metrics provided early indication of negative price trends for Priceline as the market integrated the company’s Q3 financial guidance. 

Beginning over the weekend of August 4, SMA’s S-Score for PCLN entered a negative trend declining 85 percent during a three day period.  In the pre-market of August 7, Priceline’s S-Score stood at -0.17, a notable swing into negative territory.  The behavior of SMA’s S-Score measures market trading sentiment and can provide actionable signals for upcoming price movement.  Priceline’s change in S-Score accelerated in the pre-market of August 8 posting a large decrease to -4.01 (Extreme Negative), coincident with a 16-fold increase in its S-Volume metric indicating unusually high social media activity for the stock.  Priceline gapped down strong at the open to $575.10, a decline of 15.4 percent, and continued to sell off during the session to close at $562.32, a loss of 17.3 percent for the day on high volume.  In the pre-market of August 9, Priceline’s S-Score returned to Neutral levels and stabilized for the remainder of the week.  The stock traded in a tight range to close the week at $563.16, for a net loss of 15.3 percent.

Social Media data are noisy and complex.  A single metric is insufficient to understand sentiment behavior over time.  Our S-Factors are a family of metrics, including volatility, trend and volume measures, designed to provide a complete view of the social media signature for each security tracked in SMA’s database.  SMA's processing engine continuously updates our S-Factors, capturing overnight and pre-market sentiment activities. Clients receive sentiment reports, prior to the U.S. market open, and intra-day sentiment estimates for tracked stocks, on-demand.   We invite the reader to visit our website; investigate our market sentiment metrics for Priceline, other stocks, industry sectors, and market indices; participate in our FAQ forum; and sign up for our Flash Report and Newsletter.