Sunday, February 16, 2014

The Stock Performance of the 50 Public Companies With the Most Popular Twitter Accounts

I thought it would be interesting to examine the top 50 brands on Twitter and compare their financial performance with that of the broader stock market. I hoped to demonstrate that follower counts do not matter, but the exercise of tabulating these top Twitter accounts proved even more interesting and challenging than expected.

For this exercise, I started with Socialbakers' list of the top brands on Twitter as ranked by their follower counts. I eliminated any Twitter accounts associated with privately held or nonprofit organizations. (You'll find a list of the accounts eliminated at the end of the chart below.)

I quickly ran into questions of the best way to compile this list, because the top accounts do not necessarily correlate to corporations. While Twitter accounts like Starbucks and Dior are straightforward (since both are public corporations), what about Duck Commander, the account for both the reality TV show and the company run by the Robertson clan? Should this account be associated with A&E (the network that broadcasts the show), Gurney Productions (the show's production company) or the LLC that sells duck calls? (I decided the latter and eliminated it from the list as a privately held company.)

There also seems to be some issues with Socialbakers' rankings. For example, the @Google, @Instagram and @Samsung accounts are missing from Socialbakers' list of top brands on Twitter. It turns out they are all included in the "Media" and not the "Brand" category (a distinction I do not understand and cannot defend.)

Eventually I decided to use Socialbakers' top brand list (warts and all) and include any company with a top Twitter account. So, even though @Dell only has 290,000 followers, which would not be sufficient for inclusion in the top 50 list, Dell appears on the list because the @DellOutlet account has 1.45 million followers. Two other examples are Time Warner, included not because its corporate @TWC account has 59,000 followers but because @CNNMoney has 663,000 followers, and Walgreens, which is on the list because Duane Reade, which Walgreens acquired in 2010, has 1.8 million followers.

As a result, my list is not the top 50 brands on Twitter but the 50 public companies that have the most popular Twitter accounts based on followers, as defined by the Socialbakers' list.

Looking at the list below, I drew a couple of conclusions:
  • The companies and brands that have the most followers do not necessarily outperform the market:  I have often repeated that Twitter followers and Facebook fans are a lagging indicator and not a leading indicator of success--they represent past success and not future prospects. Depending upon your interpretation of the data, this theory seems validated by the numbers.

    While the average performance of these companies in both the one- and five-year timeframe is much better than the S&P 500, these companies' performance is remarkably similar to the broader NASDAQ market index. And when you consider the median performance (which eliminates the effect from a couple of very high performing stocks and considers the more typical companies in the list), the performance is significantly below the NASDAQ index. It is hard to make the case that more fans are a predictor of future performance, based on this list; if anything, once one considers both average and median performance against both the broad and narrow stock market indices, it seems companies with lots of fans are quite average performers.
     
  • The world is, indeed, flat: If you expected this list to be dominated by US companies, you would be only partially correct; the list of companies is far from universally American. Of the 50 companies on the list, 36% are traded on the NYSE, 34% on NASDAQ and the rest are found on overseas exchanges or over the counter. Roughly a third of the firms are headquartered overseas, including Sony, Samsung, Dior, Burberry, KLM, Louis Vuitton, Kering, STC and Etihad Etisalat. (On the other hand, when brands have different accounts dedicated to English and other languages, the English accounts tend to attract a great deal more followers.)
     
  • The playing field is (more) level: It is clear that size matters in some industries, such as CPG, dining and retail, with larger firms such as Coke, Pepsi, Target, McDonald's, Yum Brands, Starbucks, Victoria's Secret and H&M scoring many fans. In other categories, however, size is far less important; for instance, while the expected tech giants can be found on this list, so are several small game developers. In addition, if you glance at the popular Twitter accounts excluded because they are not associated with public companies, you will find that nonprofits and privately held style brands possess a significant portion of the most popular Twitter accounts.
     
  • Twitter is for geeks and fasionistas: It isn't surprising that tech brands (Apple, Microsoft, Google) and digital games (EA, Activision Blizzard) would amass many followers on Twitter. What was more surprising to me (which may speak more to my fashion sense than my Twitter awareness) is that high-end style brands--the kind not common in most closets--are so popular. All told, technology, gaming and style companies represent roughly half of this list. 
When you scan this list, what do you see?  Any insights about Twitter followers and financial performance?


Twitter
Followers
5-Year Stock
performance
(2/20/09 - 2/14/2014)
1-Year Stock performance
(2/19/13 - 2/14/2014)
Symbol
Samsung Electronics:
- Samsung Mobile
- Samsung Mobile US
- Samsung Camera

7160736

5041152
849635
154.60% -13.15% KRX: 005930
Starbucks
- Starbucks Japan
5734238
872655
640.67% 38.08% NASDAQ: SBUX
Apple:
- iTunes
- App Store

5416851

2411572
448.60% 18.22% NASDAQ: AAPL
Google:
- Android
- Google Chrome
- Gmail
- Google Play
- Google Maps
- Android Dev
- Google Dev
- Google Drive
- Google Nexus
- Android.es

4560669

3603867
3291622
2628216
1983479
988146
790350
707149
689482
675279
236.28% 51.70% NASDAQ: GOOG
Dior 4316848 232.51% 12.61% EPA: CDI
Microsoft
- Windows
- Skype
- Xbox
- Windows Phone
- Office
4137169
3473323
3341881
2758977
1160997
658371
97.07% 34.31% NASDAQ: MSFT
Blackberry:
- Blackberry Help
- AyudaBlackBerry
3919123
1411775
645716
-81.49% -36.56% NASDAQ: BBRY
Whole Foods 3626975 949.20% 18.59% NASDAQ: WFM
Sony:
- Playstation
- Sony
- Playstation Latam

3550534

2028492
669457
-7.78% 18.97% NYSE: SNE
L Brands
- Victoria's Secret

3520452
576.04% 24.90% NYSE: LB
H&M 3170449 76.96% 27.17% STO: HM-B
Nike
- Nike.com
- Nike Football
- Nike Basketball
- Nike Soccer
2744223
2193198
1740761
1022047
800153
245.71% 36.62% NYSE: NKE
Intel 2741156 78.35% 17.24% NASDAQ: INTC
Burberry 2654293 451.74% 10.78% LON: BRBY
LVMH:
- Louis Vuitton
- Louis Vuitton US

2481782

1015426
177.45% 1.35% EPA: MC
Pepsi 2477044 48.54% 5.99% NYSE: PEP
Coca-Cola 2313833 77.60% 4.04% NYSE: KO
Take-Two Interactive:
- Rockstar Games

2295689
145.63% 26.72% NASDAQ: TTWO
McDonald's 2200076 68.60% 2.00% NYSE: MCD
Electronic Arts
- EA Sports
2064856
650880
62.91% 62.52% NASDAQ: EA
Walgreens:
- Duane Reade

1857691
147.91% 57.42% NYSE: WAG
Kering:
- Yves Saint Laurent
- Gucci

1840992

999689
257.97% -11.45% EPA: KER
JetBlue 1791023 46.23% 41.63% NASDAQ: JBLU
Amazon:
- Woot
- Amazon MP3
- Amazon

1641620

1599460
943181
464.89% 34.80% NASDAQ: AMZN
Twitter:
- Safety
- Mobile Support
- Feedack by Tweet
- Twitter Design
- Ayuda y Soporte
- Verified Accounts
- Twitter for News
- Translator
- Twitter Nonprofits
- Twitter TV

1630116

1329023
1250380
1243135
1138551
1046322
967131
952000
865642
858952
27.93% 27.93% NYSE: TWTR *
Southwest Airlines 1614523 192.18% 83.62% NYSE: LUV
Adidas:
- Adidas Originals
- Adidas Football
- Adidas

1545043

816417
733492
219.69% 23.68% ETR: ADS
Dell:
- Dell Outlet

1448566
51.97% 0.36% NASDAQ: DELL **
Nokia 1234404 -40.80% 78.95% NYSE: NOK
Ubisoft 1213302 -4.78% 46.09% EPA: UBI
Verizon Wireless 1098115 57.34% 4.75% NYSE: VZ
Monster:
- Monster Energy

1067761
305.84% 40.15% NASDAQ: MNST
Target 1060610 86.37% -9.16% NYSE: TGT
Yum Brands:
- Taco Bell
- Pizza Hut

1038182

729017
151.96% 14.74% NYSE: YUM
HTC 980663 -65.98% -52.85% TPE: 2498
Activision Blizzard:
- Infinity Ward
- Treyarch Studios

974383

937031
104.12% 37.79% NASDAQ: ATVI
Sega 875179 129.55% 47.70% TYO: 6460
Tiffany & Co. 866026 336.87% 36.09% NYSE: TIF
Urban Outfitters 829082 117.27% -13.18% NASDAQ: URBN
Air France - KLM:
- KLM

804814
17.46% 6.74% OTCMKTS: AFLYY
Geeknet:
- ThinkGeek

781952
84.74% 16.23% NASDAQ: GKNT
STC:
- STC_KSA

762334
57.93% 53.23% Tadawul: 7010
American Airlines 739106 116.95% 348.43% OTCMKTS: AAMRQ
CBOE 727238 81.59% 56.59% NASDAQ: CBOE
American Express 698949 465.44% 44.27% NYSE: AXP
Etihad Etisalat Co
- Mobily

694079
195.53% 24.16% Tadawul: 7020
Foot Locker 692426 416.58% 16.23% NYSE: FL
CNN Money 662131 151.06% 22.01% NYSE: TWX
Audi 645323 2.73% 10.99% FRA: NSU
Ralph Lauren 636793 324.98% -10.04% NYSE: RL
AVERAGE 183.61% 28.80%
MEDIAN 123.41% 22.85%
NASDAQ 176.60% 32.96%
S&P 500 122.37% 20.98%
Not publicly traded: Vine, Hootsuite, Chanel, ClaroRonaldo, Dropbox, UNICEF, Firefox, TOMS, Nimbuzz, Dolce & Gabbana, Twitter Movies, YouTube Creators, Subway, EMANSANGELS, Calvin Klein, Jumpman23/Jordan, Marc Jacobs, Charity Water, Forver 21, Nando's, Cines Unidos, WWF, Sephora, Verace, Armani, Christian Louboutin, American Red Cross, Travel Bargains, Gates Foundation, ABF Foundation, Red, Human Rights Watch, Aluminaid, JustUnfollow, Greenpeace, Amnestry International, Gibson Guitar, DMedicalinfo, AirAsia/Tune Group, CERN, Ike's/IkesLove, UnfollowTT, GoPro, Save the Children,  Roberto Cavalli, TwitBird/Nibirutech, Kickstarter, Topshop, OneCampaign,  Gearbox Software, Mayo Clinic, Mojang Team, Non-Violence Project Mexico, Beautylish, Duck Commander, Odontosalud, Hotel Deals Weekly, Spotify, Chak89,  Stella McCartney, Do Something, tenki.jp, Global Network for Rights and Development, Klout, Greenpeace Brasil, Estetica y Salud, Harvard Health, Hollister Incorporated, Diane von Furstenberg, Valentino
* Twitter since 11/8/2013
** Dell: 2/20/09 to 10/29/13 (when it went private)

1 comment:

Terry Golesworthy said...

Not surprised at all about no correlation between Twitter followers and performance. Twitter and social are just ways to communicate. It says nothing about the message or the experience. You might argue large Twitter followings come as a result of poor customer service or mis-guided marketing. In a simple insurance example (sorry to keep on about insurance), customer service handles for Progressive (@ask_progressive)and USAA (@USAA_Help)are about the same. What does that tell us about how well the company might perform overall. Nothing at all, not even about the level of customer service. Bottom line social media activity has no relevance at all unless it is indicative of a corporate culture that prioritizes customer retention and expansion.