A Look at the Social Media Chatter Surrounding Tempur-Pedic's Collapse
This week, Social Market Analytics (SMA) revisits Tempur-Pedic International (NYSE: TPX), a manufacturer of mattresses and bedding products. In April, Tempur-Pedic's social media signature indicated high levels of negative sentiment ahead of market reaction to the company's full-year earnings forecast that fell short of Wall Street expectations.
Tempur-Pedic's stock has since experienced a sustained sell-off, but plunged an additional 48.7% on June 6 after the company reported earnings sharply below expectations. During the week, there was much discussion of the company's financial prospects, with TPX appearing three times 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.
In the pre-market of June 6, SMA's processing engine identified TPX as the stock with the most negative sentiment of any stock tracked in SMA's databases. SMA's sentiment metrics for TPX provided initial indication of negative price movement, the persistence of negative sentiment, and indication of a recovery as the stock began to bounce off of the lows of the price collapse.
On June 6, SMA's S-Score for TPX moved dramatically lower from Positive into Negative territory. In the pre-market of market of June 6, TPX's S-Score deteriorated to a level of -4.18 (Extreme Negative). The stock opened the session at $26.71, a gap down of 38.8% from the previous day, and continued to sell-off to close at $22.39. The behavior of SMA's S-Score measures market trading sentiment and can provide actionable signals for upcoming price movement.
In the pre-market of June 7, TPX's S-Score reached a level of -2.60 (High Negative), coincident with a massive increase in its S-Volume metric indicating unusual, active social media content. These metrics identified persistent negative sentiment with the stock trading flat on the day to close at $22.39. On June 7, TPX's S-Score eased, somewhat to 1.89 (Moderate Positive) indicating a reversal in market sentiment. TPX opened at $22.84 and established a sustained intra-day up trend to close at $25.54, a gain of 14% for the day, but at a loss of 40.2% 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 TPX, other stocks, industry sectors, and market indices; participate in our FAQ forum; and sign up for our Flash Report and Newsletter.
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