Did Social Media Chatter Predict the Decline in Finish Line?

This week, Social Market Analytics looks at The Finish Line FINL, a mall-based specialty retailer of performance and athletic casual footwear, apparel, and accessories for men, women, and children. Shares of Finish Line topped the Nasdaq Biggest Percentage Decliners with a 16.26% loss on March 30. This decline occurred after the company reported earnings in line with street estimates, but stated that first quarter profit is expected to fall 30% on lower margins.

Finish Line also announced that a private equity firm will invest $10 million and takeover day-to-day operations of its Running Specialty Group. During the week of March 26, SMA's metrics for Finish Line provided indication of upcoming negative price movement, as market sentiment changed rapidly from positive to negative as the week progressed.

On March 26, SMA's S-Score for FINL began a downward trend from High Positive levels. Over the next three days, the stock was ranged bound, trading $24.84 to $25.54, but market sentiment, as measured by SMA's S-Score, declined 112% to enter negative territory. The behavior of SMA's S-Score metric measures market trading sentiment and can provide actionable signals for upcoming price movement. In the pre-market of March 30, FINL's S-Score reached -2.18 (High Negative), coincident with a spike in S-Volume to abnormally high levels indicating increased social media activity. On March 30, FINL opened at $23.17, down 8.56% and continued to sell off intraday closing at $21.22, a loss of 16.26%. Into Saturday, March 31, FINL's S-Score continued to slide further into High Negative territory at -3.09, with a continued increase in S-Volume, suggesting the possibility of continued downward pressure on the stock as trading resumes on Monday.

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-Factor metrics, capturing overnight and pre-market sentiment activities. Clients receive sentiment reports prior to the US market open and on-demand throughout the day. We invite the reader to visit our website; investigate our market sentiment metrics for FINL, other stocks, industry sectors, and broad market indices; and participate in our FAQ forum.