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The Battle of: Main Street vs Wall Street www.digital-mr.com | info@digital-mr.com | @DigitalMR ©2021 DigitalMR® All Rights Reserved This document contains proprietary/confidential company information. All unauthorized distribution prohibited. Any unauthorized recipient please immediately notify DigitalMR by email at info@digital-mr.com
Agenda 1. What is the commercial case for DigitalMR? 2. Case Study: Main Street Vs Wall Street a. Can social intelligence predict stock fluctuation? b. Which specific time series show better correlation/causation? c. What periodic combinations between signal and predicted value work best? d. What time lag should be used? 3. Other Findings 4. Closing Thoughts
Commercial Case: SITID Social Intelligence for Trading & Investment Decisions ©2021 DigitalMR® All Rights Reserved
The Alternative Data Market Global Market “55% of funds spend Alternative Data $100K to $1M per year on US$7B alternative data” - Lowenstein Sandler report, September 2019 Social Sentiment US$500M Source: Opimas.com ©2021 DigitalMR® All Rights Reserved
The Problem Signal lost in noise & Limited scope Irrelevant posts USA US tickers Low sentiment accuracy Hello! English language No topic annotation News and Twitter Client Use Cases: Not just about the discovery of new alpha but perhaps more importantly about risk monitoring and deal sourcing ©2021 DigitalMR® All Rights Reserved
The Solution Custom: data cleaning models sentiment annotation models Selected topic annotation models tickers from other large Stock Exchanges Committed Accuracy: ≥90% relevance ≥80% semantic ≥75% sentiment ©2021 DigitalMR® All Rights Reserved
Go-to-Market Strategy Leverage & Expand existing relationships Discussions with New Partners 60% Indirect Sales Discussions with Funds New Funds 40% Direct Sales Outbound & Inbound activity ©2021 DigitalMR® All Rights Reserved
Value Proposition → High quality signals → Sentiment + topics → Tickers across all major stock exchanges → Better investment & trading decisions ©2021 DigitalMR® All Rights Reserved
Case Study: Main Street Vs Wall Street ©2021 DigitalMR® All Rights Reserved
Case Study Overview 745,084
• TIME PERIOD: 1st Dec. 2020 – 31st Jan. 2021*
• SOURCES: Twitter, Reddit, Blogs, Forums, News (editorial), Reviews, Videos, Dark
Web
• TOTAL NUMBER OF POSTS: 3,017,122
• KEYWORDS GATHERED: "gamestop" OR "robinhood" OR "melvin capital" OR
(("GME" OR "AMC" OR "BB" OR "NOK" OR "EXPR" OR "PLTR”) AND ("stock" OR
"stocks" OR "shares" OR "share price" OR "NYSE" OR "nasdaq" OR "wallstreet" OR
"trade" OR "trading" OR "short"))
Total No. of Posts
*Reddit data is available from 1st Jan. 2021 to 31st January 2021
*Data from all other sources is available from 1st Dec. 2020 to 31st Jan. 2021
©2021 DigitalMR® All Rights ReservedText Annotation Approach ≥75% sentiment ≥80% semantic ≥90% relevance Custom Sentiment Models Drill-down Topics Noise Elimination Starling Bank The Web Company Data Gathering Products Customer Experience Post Annotation: Sentiment … Sentiment Model Creation NOT Post Processing: Sentiment Availability Quality Store Website Starling Bird Precision Checks Price Model Improvements Location Navigation In Store Offers Data Export (CSV, Excel Tables, PPT, dashboard) Facilities Online Convenience ©2021 DigitalMR® All Rights Reserved
$GME - Time Series & Periodic Combinations Pearson Correlation *Reddit data is available from 1st Jan. 2021 to 31st January 2021 *Data from all other sources is available from 1st Dec. 2020 to 31st Jan. 2021 ©2021 DigitalMR® All Rights Reserved
$GME - Highest Pearson Correlation Coefficient *Reddit data is available from 1st Jan. 2021 to 31st January 2021 *Data from all other sources is available from 1st Dec. 2020 to 31st Jan. 2021 ©2021 DigitalMR® All Rights Reserved
$EXPR - Time Series & Periodic Combinations Pearson Correlation *Reddit data is available from 1st Jan. 2021 to 31st January 2021 *Data from all other sources is available from 1st Dec. 2020 to 31st Jan. 2021 ©2021 DigitalMR® All Rights Reserved
High correlation between GameStop buzz and stock price Pearson correlation (r): positive + neutral buzz fluctuation vs $GME stock price return (1 day lag) = 85% ©2021 DigitalMR® All Rights Reserved
High correlation between AMC buzz and stock price Pearson correlation (r): total buzz fluctuation Pearson correlation (r): vs $AMC total stock price return (1 day lag) buzz fluctuation vs $AMC stock = 83% price return (1 day lag) = 83% ©2021 DigitalMR® All Rights Reserved
High correlation between Express buzz and stock price Pearson correlation (r): total buzz fluctuation vs $EXPR stock price return (1 day lag) = 82% Pearson correlation (r): total buzz fluctuation vs $EXPR stock price return (1 day lag) = 82% ©2021 DigitalMR® All Rights Reserved
High correlation between Nokia buzz and stock price Pearson correlation (r): total buzz fluctuation vs $NOK stock price return (1 day lag) = 85% Pearson correlation (r): total buzz fluctuation vs $NOK stock price return (1 day lag) = 85% ©2021 DigitalMR® All Rights Reserved
Other Findings ©2021 DigitalMR® All Rights Reserved
1. The “YOLO” attitude 16,000 13,926 “@wallstreetbets if we could YOLO some BB 14,000 tomorrow that would be great” (Twitter) 12,000 NO. OF POSTS: 62,105 10,000 8,000 5,616 “I bought GME at the top. Don't care about 6,000 making a profit, fuck it. YOLO” (Forums) 2,988 4,000 1,490 Number of posts 2,000 0 “At the moment, if I had a spare $50k cash to yolo on 01-Dec 03-Dec 05-Dec 07-Dec 09-Dec 11-Dec 13-Dec 15-Dec 17-Dec 19-Dec 21-Dec 23-Dec 25-Dec 27-Dec 29-Dec 31-Dec 02-Jan 04-Jan 06-Jan 08-Jan 10-Jan 12-Jan 14-Jan 16-Jan 18-Jan 20-Jan 22-Jan 24-Jan 26-Jan 28-Jan 30-Jan something, I'd throw it in GME shares or PLTR shares. PLTR for the long term, GME for the short term. Maybe split $20k GME / $30k PLTR, and once GME hits $150 or higher take my “I just cleared my debts, i have $500, I want to go YOLO, do i gains and dump them into more PLTR.” (Forums) buy GME at the price that its at?” (Reddit) “BRB gonna yolo everything into “HOLD THE LINE. YOLO THIS SHIT. AMC. “YOLO into AMC tomorrow? GME! It can only go up!” (Twitter) GAMESTOP. NOKIA. LETS DO IT!” (Videos) or nah?” (Forums) ©2021 DigitalMR® All Rights Reserved
2. Other companies come up without searching for them $BB 826,755 “Check out this hot penny stock Naked $GME 719,267 (NAKD) and Express (EXPR)! (…)” (Videos) $EXPR 549,645 $AMC 285,299 $NOK 126,083 $PLTR 20,702 “@TreJames_ I saw amc bed bath and beyond tanger outlet $BBBY 15,285 and some others that are gonna be targeted next” (Twitter) $NAKD 14,676 $AAL 13,002 50,417 $SNDL 7,454 “FWIW AAL is next reddit “Gogo nakd gme and amc are all high in mob target” (Forums) short interest this will be interesting. AAl is going up too and thats great! I have little “my next bet is bed bath and beyond new amount but i like it.” (Forums) management team and its also being shorted. its “AAL all in baby” (Reddit) actually somewhat similar to GME restructuring. Just lmao.” (Forums) “I am in with NOK, AMC, SNDL ...” (Reddit) “AMC, BB, BBBY madness” (Twitter) “@elonmusk LETS BUY $AMC $NOK “#SNDL isn’t blocked yet, get it sent to $GME $NAKD TRAP THE SUITS” (Twitter) “Hold amc but also buy sndl” (Twitter) the moon ” (Twitter) ©2021 DigitalMR® All Rights Reserved
3. Net Sentiment ScoreTM Melvin Capital -17% “(…) HOLD THE FUCKING STONKS!! $EXPR ✋ ✋ MELVIN CAPITAL BURN TO -6% THE GROUND incoming tendies!!” (Reddit) -2% Robinhood $GME 2% “Looks like my math so off by $500 $AMC 6% mil loll. Melvin Capital is fucked. That also assuming GME is the only $PLTR 9% company they are shorting.” (Forums) $NOK 14% $BB 56% “I'm extremely happy that Melvin Capital got caught on their bullshit “Melvin capital can eat shit. (…)” (Forums) here. (…)” (Twitter) “All my homies hate Melvin capital”(Reddit) “I'd say they bankrupted themselves by playing the game the “Maybe Melvin Capital doesn't have the leverage for that? Elon way they were. The only thing that happened is that the Musk went against them and he has decent connections. market pivoted and reacted differently..” (Forums) Perhaps they are really about to go down.” (Videos) “That’s why I don’t care if I lose my few shares. I’m not “Or buy high and push higher to fuk bears & Melvin Capital”(Reddit) selling until Melvin capital is out of business.” (Reddit) ©2021 DigitalMR® All Rights Reserved
4. Some believe Elon Musk is involved, as payback to Melvin C. 3,000 2,784 2,500 “@Reuters Elon tweeted Gamestonk yesterday with a link and was in the reddit forum about 2,047 2,000 Melvin hes buying a bunch of Game Stop apparently because Melvin was shorting Tesla NO. OF POSTS: 10,970 for a while and this is payback.” (Twitter) 1,500 1,000 500 “All I got is the people getting screwed the Number of posts most (thus far) are the types of people who 0 own multiple boats. And Melvin Capital tried to 01-Dec 08-Dec 15-Dec 22-Dec 29-Dec 05-Jan 12-Jan 19-Jan 26-Jan short Tesla multiple times Elon never forgot and now he seems to be the captain of the SS TAKE DOWN HEDGE FUNDERS” (Twitter) “@wrestlingskum @N3rdC3ntral @People4Bernie Its also worth noting that Elon Musk is shilling Gamestop stock specifically because its Melvin Capital who repeatedly shorted Tesla for years eating the cost.” (Twitter) “@AmiFFXIV After reading up on this it seems that one hedge fund in particular is the target here.. Melvin. They had a large short position on Gamestop which “quote: Reddit Investors @redditinvestors Elon Musk is means they are losing billions now it is going up. This shilling GameStop because Melvin Capital shorted Tesla a long hedge fund shorted Tesla previously and Elon has time ago and bragged about it.” (Forums) been tweeting about it..” (Twitter) ©2021 DigitalMR® All Rights Reserved
5. $NOK and $BB are stocks to keep an eye on 47,986 46,510 50,000 “Ladies buy BB when the market opens 45,000 while its still low, it will go up” (Forums) NO. OF POSTS: 954,946 36,681 40,000 35,000 27,406 30,000 “Let’s not lose this fight, buy all the shares you can 25,000 and hold your shares with diamond hands , let’s 20,000 goooo $GME $AMC $BB $NOK” (Forums) 15,000 Number of posts $NOK 10,000 “BUY BB HOLD BB TOMORROW ” Number of posts $BB 5,000 (Reddit 0 01-Dec 08-Dec 15-Dec 22-Dec 29-Dec 05-Jan 12-Jan 19-Jan 26-Jan “@business BUY $NOK $BB $AMC lets get this done!!!” (Twitter) “ NOKIA (NOK) STOCK | MASSIVE POTENTIAL | ARE YOU BUYING?” (Videos) “@reddittrading Buy $NOK “BUY AND HOLD AMC THIS DUDE IS “Buy BB shares Monday before lift off please and hold!” (Twitter) TRYING TO SWAY US OFF THE SHIP, BUY GME, BUY AMC, BUY BB, BUY NOK AND ” (Videos) FUCKING HOLD” (Reddit) “@bIackopium HOLD THE LINE #AMC “LETS GOO GUYS!! BUY NOK BB & #GME #NOK #BB BUY THE DIPS. DO AMC, KEEP THEM BUSY” (Reddit) NOT SELL” (Twitter) “@GerberKawasaki BUY NOK!!” (Twitter) ©2021 DigitalMR® All Rights Reserved
6. “FOMO” is one of the reasons to buy 900 786 800 “Market is insane on $GME, everyone is FOMO. 676 Germany market propped it up 310 a share. Melvin 700 Capital is dead in the water.” (Forums) 600 NO. OF POSTS: 3,830 500 400 “@uhWizard i sold amc and now i 300 have fomo still in nok” (Twitter) 200 Number of posts 100 “@breakneck_tv I think I hopped into AMC a bit late, but fomo 0 after staring at GameStop the last couple days made it so I couldn’t sit out anymore” (Twitter) 02-Jan 04-Jan 06-Jan 08-Jan 10-Jan 12-Jan 14-Jan 16-Jan 18-Jan 20-Jan 22-Jan 24-Jan 26-Jan 28-Jan 30-Jan 01-Dec 03-Dec 05-Dec 07-Dec 09-Dec 11-Dec 13-Dec 15-Dec 17-Dec 19-Dec 21-Dec 23-Dec 25-Dec 27-Dec 29-Dec 31-Dec “I will feel sad if anyone go broke because they FOMO GME” (Reddit) “Am I the only one with FOMO buying GME today? I bought one share yesterday and am getting five when the market opens today...not the biggest loss if it goes badly I guess.” (Forums) “Well I FOMOed into BB this morning.” (Forums) “I believe there is definitely a strong element of “the fear of missing out has “YOLO IM BUYING TOMORROW. FOMO with this stock, especially with what we’ve surpassed the fear of losing FOMO IS TOO REAL. TO THE seen in stocks like GME and AMC.” (Forums) money " - some dude” (Reddit) MOON ” (Reddit) ©2021 DigitalMR® All Rights Reserved
7. A taste of the Dark Web NO. OF POSTS: 6,462 “Melvin Capital lost about 53% in January on “Guys I'm speaking literally GameStop Corp. after the firm found itself on the , retail exchanges are “@If you missed gamestop.. Buy receiving end of a short squeeze started by retail removing the ability to buy Blackberry and Nokia and Silver. investors motivated on Reddit. (…)” AMC, GME and BB” (…)” “Billionaires can remain solvent longer “We'll list every single #stock that “I've heard it's about to spike than you can remain irrational. Melvin @RobinhoodApp delists as a tokenized stock. like GameStop did” Capital has a very real chance of going Blockc ain is the real way we democratize the insolvent. (…)” financial system together. Trade $GME, $BB, $SLV, $NOK, $AMC and other tokenized stocks “Melvin Capital lost about 53% in on Bittrex Global now.” January on GameStop Corp.” “buy gamestop stock and hold the line soldier” “ (…) it's important to realize that the eventual winners of this “Robinhood is automatically scenario aren't going to be the Redditors holding on to $GME selling GME shares without user shares, but the wealthy short-sellers who manage to either consent now.” predict the pop or simply have enough assets to hold on long enough for it to happen. (…)” ©2021 DigitalMR® All Rights Reserved
Closing Thoughts 1. Accuracy of annotation 2. The most important DS skillset 3. Sales 4. YOLO meets FOMO ©2021 DigitalMR® All Rights Reserved
Question Time! Would you like to know more? Visit the link below for a demo or a free trial of listening247: https://listening247.com/ or apply for an internship at DigitalMR https://www.digital-mr.com/careers/data-science-assistant Michalis A. Michael | mmichael@digital-mr.com | @DigitalMR_CEO www.digital-mr.com ©2021 DigitalMR® All Rights Reserved This document contains proprietary/confidential company information. All unauthorized distribution prohibited. Any unauthorized recipient please immediately notify DigitalMR by email at info@digital-mr.com
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