Did Social Media Chatter Predict Green Mountain's Decline?

This week, Social Market Analytics looks at Green Mountain Coffee Roasters GMCR. Green Mountain manufactures the Keurig single-serve coffee brewing system. Green Mountain's stock reacted extremely negatively on March 8th, after Starbucks SBUX announced that it will introduce its Verismo single-serve brewing system.

Observation of SMA's S-Score and S-Volume metrics for Green Mountain during the week of March 5th provided early indication of the possibility of negative price movement ahead of reaction to the press release.

On March 5th and over the prior 15 days, SMA's S-Score metric for Green Mountain was in a neutral range, SMA's S-Volume metric was at a stable low level and Green Mountain's stock traded in a range from $65 to $69. SMA's S-Score measures the level of market sentiment (positive or negative) and S-Volume measures the intensity of sentiment activity observed from a stock's Social Media signature.

On March 7th, Green Mountain's S-Score began a downward trend and the stock closed the session at $63.72, a decline of 5.6% from March 5th. On March 8th, GMCR's S-Volume increased 266% from the prior day's level, coincident with an accelerating decline in S-Score to -3.74 (Extreme Negative) and closed the day at $62.40, a further decline of 2.1%. In the pre-market on March 9th, Green Mountain's S-Volume experienced a massive increase to 364, a level not seen since February 2nd, and a continuation of Extreme Negative sentiment at -3.95. Green Mountain opened the session at $52.00, closed for the day down 15.72%, and ended the week at $52.59, a decline of 22.1% from March 5th.

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 by 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 during market hours. We invite the reader to visit our website; investigate our market sentiment measures for Green Mountain, other stocks, industry sectors, and broad market indices; and participate in our FAQ forum.