Twitter Bots Changed Tesla’s Tides

Twitter Bots Changed Tesla’s Tides

If you’ve ever been on automotive Twitter, there’s a pretty good chance you’ve come across an account that’s such a hardcore Tesla fan that you have to wonder if there’s actually a real person behind the account or if it’s actually a bot. A new report from the Los Angeles Times confirms the suspicions of many people: That Elon Musk’s rise to social media prominence is tied to the influence of Twitter bots.

Here’s a little bit more from the article:

In early November 2013, the news wasn’t looking great for Tesla. A series of reports had documented instances of Tesla Model S sedans catching on fire, causing the electric carmaker’s share price to tumble.

Then, on the evening of Nov. 7, within a span of 75 minutes, eight automated Twitter accounts came to life and began publishing positive sentiments about Tesla. Over the next seven years, they would post more than 30,000 such tweets.

With more than 500 million tweets sent per day across the network, that output represents a drop in the ocean. But preliminary research from David A. Kirsch, a professor at the University of Maryland’s Robert H. Smith School of Business, concludes that activity of this sort by so-called bots has played a significant part in the “stock of the future” narrative that has propelled Tesla’s market value to altitudes loftier than any traditional financial analysis could justify.

The LA Times uses these findings to raise an important question: Are these bots deliberately programmed to manipulate Tesla stocks? The U.S. Securities and Exchange Commission investigated Elon Musk back in 2018 when Musk tweeted that he was intending to take Tesla private. That obviously resulted in massive changes to Tesla’s stocks — and researchers think the same could be happening on a much smaller scale thanks to these bots.

Here’s a little more:

Kirsch and Chowdhury tracked 186 Tesla-related bot accounts and found that after each was launched, the company’s stock appreciated more than 2%. (They looked at the average stock return for the week previous to the bot’s creation and for the week following.) While Tesla’s market value has increased over the years, the price has seen dramatic ups and downs. The periods around bot creation showed sharp increases, but outside those windows, trading was far more volatile, Chowdhury said.

“This isn’t a causal relationship, but it does raise questions,” Kirsch said, about why there’s a correlation that does not appear to be random. “We’re trying to understand the mechanism. It can’t be just a bunch of tweets that push the stock. People have to notice them, interpret them and act on them.”

The whole article is worth your time, especially since it makes you wonder just what an impact social media can have on the success or failure of a brand.