Market Overview

Social Media Chatter on Dell Around Its Earnings Report

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This week, the Social Market Analytics (SMA) focus pick is Dell(NASDAQ: DELL). On May 22, Dell reported worse than expected earnings, which triggered a sharp selloff to become the biggest price decliner for the S&P 500 as of the close on May 23.

During the week, Dell appeared twice on SMA's morning Flash Report, which identifies stocks, in the pre-market, with extreme levels of market sentiment that are likely to trade with high activity during the upcoming session. In the pre-market of May 23, SMA's processing engine identified Dell as the stock with the most negative sentiment of any stock in the universe tracked by SMA.

As the week progressed, SMA's sentiment metrics provided initial indication of negative price trends for Dell and then an indication of a sentiment reversal as reports emerged that the computer maker is engaging M&A discussions.

Beginning on May 22, SMA's S-Score for Dell entered a sharp downward trend from Positive to Negative territory. In the pre-market of May 23, Dell's S-Score stood at -4.12 (Extreme Negative). The behavior of SMA's S-Score measures market trading sentiment and can provide actionable signals for upcoming price movement. The stock opened the May 23 session at $12.87, off 14.7% from the previous close, and continued to selloff to end the day at $12.49.

Negative market sentiment was coincident with a 10-fold increase in Dell's S-Volume metric indicating unusually high social media activity. In the pre-market of May 24, negative sentiment persisted at -2.28 (High Negative) with continuation of high levels of S-Volume. Dell opened the May 24 session at $12.54 but closed at $12.45 for a slight loss. As the trading day evolved on May 25, reports emerged that Dell in is discussions to buy Quest Software (NASDAQ: QSFT), a maker of tools for managing computer systems.

Intraday S-Score metrics for Dell reversed trend, rising from Negative into Neutral levels, as social media integrated the effects of the news. Dell's stock stabilized to close the day at $12.46, but at a net loss of 16.8% for the week.

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 Dell, other stocks, industry sectors, and market indices; participate in our FAQ forum; and sign up for our Flash Report and Newsletter.

Posted-In: Social Market AnalyticsEarnings Long Ideas News Short Ideas Movers Tech Trading Ideas Best of Benzinga

 

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