Stock Twits is a tool for searching stock tweets on twitter. It’s a nifty idea and a fine feat of programming (prefixing a ticker symbol with $ indexes the and adds a chart to the tweet.) Cool. Unfortunately, the tool is only as good as the tweets, and from what I’ve seen the tweets are for twits. Nothing but noise and probably more than a little nefariousness.
I can’t think of a better tool for taking advantage of a bunch of stock twits with the old pump and dump. It goes like this: tweeter-dee builds a following by convincing people he’s a trading guru, tweeter-dee buys stock in a small illiquid company, tweeter-dee tweets about said company, twitter-dumb buys the stock and runs up the price, tweeter-dee sells his stock profiting on the run up, leaving tweeter-dee holding the tweet.
The strategy is generally illegal, except that there’s a giant loophole. If you tell people you bought the stock, then you’re in the clear. If your twitterers are big enough twits they’ll still fall for it, but of course they will because they’re twitter-dumb and tweeter-dee is their guru coming to take them to the promise land.
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