July 27th, 2012 by Lloyd Gofton
We often talk about the power of social media and how reach is ever expanding, but stories like this one are a beautiful and simple example of this in action.
Reuters has announced that shares of J.C. Penney jumped almost 10% briefly on Wednesday this week after Nina Garcia, Marie Claire magazine fashion editor and judge on television show “Project Runway” tweeted about the department store’s revamp mentioning chief executive Ron Johnson.
“I’m @jcpenney’s HQ. Thank you Ron Johson (sic) for the walk through of JCP’s prototype. Get ready to shop! Its (sic) going to be a game changer!”
J.C. Penney shares rose to as much as $23.09. The stock was up 4.9 percent at $22.02 later on Wednesday afternoon on the New York Stock Exchange.
Although the link between the tweet and the rise in stock cannot be clearly made, TD Ameritrade chief derivatives strategist J.J. Kinahan immediately referenced the tweet when explaining the share spike, and there did not seem to be any other obvious contributing factors.
J.J. Kinaham said:“With that we saw the stock go sharply higher, along with increased buying in call options, a bullish play.”
Interestingly Reuters also mentioned that Garcia recently became J.C. Penney’s “Style Voice” and fashion collection curator, so it’s up for debate whether the tweet was entirely unlinked, but the point remains that an influential tweet seems to have had a huge impact on share price, and helps to prove the influencer status that Twitter can now claim.