#likefolio

On January 29, Starbucks reacted to President Trump’s travel ban by issuing a statement that it would hire 10,000 refugees. This announcement has backfired with consumers in a big way.

Consumers aren’t happy:

The backlash was immediate. Over the next few days, consumer buzz on Twitter spiked higher…and not in a good way. During that those few days, Starbucks saw its Consumer Happiness level go from its normally impressive 75% positive all the way down to 40% positive. That’s right—six out of every 10 opinionated tweets about the company were negative:

Throughout 2016, Consumer Happiness for Starbucks ranged 70-75%. Now it’s at 66%. This is the 7-day average, so that 66% does NOT include anything from the huge backlash immediately following the announcement.  

A loss of 7-9% in consumer happiness levels is a big problem, especially when it is sustained for a significant period of time like this.

For comparison, McDonald’s customer happiness has averaged around 67-69% consistently. This means Starbucks went from 4-5 points better than McDonald’s to 3 points worse, which means poor comparisons for the company. Even worse, it’s the kind of data we see when consumers are in the process of making behavioral shifts that could have lasting impact on same store sales and revenue reports into the future.

Is Starbucks losing business?

To see whether the backlash is affecting actual spending, we need to drill down into LikeFolio’s Consumer Spend metrics for the company. These are measurements of people actually talking about being in the stores and buying the products… LikeFolio’s is the most unique and powerful data set.

The results are clear:

Starbucks has seen Consumer Spend mentions BELOW its one-year moving average for 80% of the days since the refugee hiring announcement.

Meanwhile, McDonald’s has seen Consumer Spend mentions above its one-year average for over 90% of days since the announcement.

In other words, since the announcement, Starbucks is shrinking while McDonald’s is growing.

Fallout

The data is clear – consumers are not happy with Starbucks’ decision to prioritize hiring refugees.  

As a direct result of Starbucks’ announcement to hire 10,000 refugees, the company’s brand value has taken a significant hit, they’re losing market share to competitors, and sales are dropping.

Yesterday we took a hard look at Amazon’s dominance.  That led us to some pretty cool findings around Target and Walmart, from both an earnings perspective and a social data perspective.  So which one is winning the race for 2nd place in consumer’s minds?

Consumers like Target

Target is well-liked. Not nearly as high as Amazon’s ratings, but still quite respectable for a brick and mortar retailer.  Here is Target’s positive sentiment levels, as seen in the free LikeFolio app:

More importantly than consumer sentiment, we are seeing a slight uptrend in purchase intent mentions for Target--- meaning people are talking about purchases they make there more and more in social media.  That’s a good sign that company sales are headed in the right direction (especially online). 

On the other hand, when we look deep into Walmart’s social data, we actually see a slight downtrend in purchase intent mentions.

The social data is corroborated by sales data released by the companies.  

Target saw 1.9% same store sales growth compared to Walmart’s paltry 0.6% growth.

Online, the trend is even more exaggerated, with Walmart growing online sales at 8% while Target posted a monster quarter of above 50% growth..actually taking share from Amazon.

It all adds up

When social data from LikeFolio is tracking right along with sales data released by the companies, and the trend is this clear-- there’s an opportunity.

Three questions keep coming up from LikeFolio users:

1)  What’s the best way to use the LikeFolio app in my trading?

2)  What do you think of oil here?

3)  Why do you guys talk so much about options?

We’ve been trading actively (and effectively) at LikeFolio HQ lately, so we thought it would be a good time to discuss a very important topic-- managing risk in your investments and trades.

In today’s LikeFolio Broadcast, we get pretty detailed about some of the lessons we’ve learned through mistakes, and best practices for limiting losses.  

Here’s the basic timeline of the broadcast:

Start:  Managing a losing position by increasing duration.

4:00    Using options spreads to limit risk.              Understanding maximum loss of a trade            Keeping position sizes small

6:00    Understand how to BETA-weight your positions to the S&P 500

10:30  Using thinkorswim to determine beta weighting.            If you don’t have a thinkorswim account, get one here! 

11:45  Review of some recent trade ideas:  $JWN, $TWTR, $ZNGA, $GPRO

17:00  Why we do NOT use stops

The Broadcast is available daily via the free LikeFolio app or through iTunes subscription.

We are proud to announce the LikeFolio Enterprise API.

It's what powers TD Ameritrade's game-changing social research for retail clients.

It's how institutional trading firms are capturing real-time consumer behavior shifts that used to require time consuming and expensive solutions like phone surveys and channel-checking initiatives.

Here's a bit about how the LikeFolio Enterprise API can help your fund or application succeed:

Funds

The LikeFolio API offers social-data metrics focused on consumer purchase behavior around the brands and products owned by publicly traded companies. 

Whether it's volume of tweets, brand sentiment, or volatility of opinion, your systems will receive actionable data in a fast and flexible API that will integrate seamlessly into your existing data-consumption systems.

This consumer-originated data is a statistically significant leading indicator. Examples of how LikeFolio data can be used include:  

Retail same-store-sales predictions Tech user growth and stickiness Media company brand breakouts

To request more information about utilizing the LikeFolio data-stream for your trading strategies and modeling, please submit the form on this page.

Media/Apps

Give your users a richer experience that sets you apart from other financial destinations.

The LikeFolio API can deliver:

1. Brand <--> Company taxonomy  Allow your users to look up stock symbols by typing in their favorite brand, or view the brands behind the stocks in their portfolio.

2. Social-data metrics   Get mention volume and sentiment numbers for stocks that allow your users to understand more about how consumers are reacting to the company's offerings

3. Top tweets & links   Get a list of most-shared links for any ticker symbol-- not just about the ticker itself, but any of the brands or products that company owns.  In addition, we can deliver top-tweets about the company for you to embed, instantly giving your application a real-time, living feel.

To learn more and request contact, please visit this page. 

About LikeFolio

For a moment, I want you to think of Twitter—- all of twitter—-as a massive brand survey.  But instead of calling 1000 people and asking them what they think, we sit back and listen for millions of people to tell us… naturally, voluntarily, and in their own words.

We take that stream of consumer thought and map it against our proprietary brand-taxonomy, looking for mentions of the brands and products that drive the revenues of publicly traded companies.

This approach gives our data an enormous advantage:  Time.  We are listening at the consumer level as purchase decisions are being made, faulty items being returned, or new product promotions are being reacted to.

We then take all of that data, tune it to the most useful signal, and send it out to you for quantitative analysis or display in your application.

We are the leaders in utilizing social-data for financial research of consumer behavior... and we want to help power your success.

Andy Swan, Co-Founder of LikeFolio - #PreMarket Prep for January 14, 2015

It's certainly true that Jim Cramer has been tweeting about TheStreet ($TST) less and less over the past year as the stock has fallen nearly 25% from its 2014 highs...

But is that really because Cramer is too busy doing his TV job at CNBC?

Well... let's take a look at Cramer's mentions of CNBC over the same time period...

As you can see, over the past year, Cramer has tweeted at least 60% more about CNBC than TheStreet... and it's only gotten worse as the year has gone on.

And TheStreet shareholders aren't happy.

In an open letter sent earlier this week, Cannell Capital, a major $TST shareholder, accuses Cramer of being dilutive to TheStreet, rips on his multi-million dollar compensation package, and suggests that Cramer should quit his CNBC gig and focus on building value for TheStreet.

Here is a small excerpt of just how biting this letter is:

Ouch.

You can check out Cramer's mentions of TheStreet  for yourself (plotted on a stock chart) to get an idea of how he's promoting the company he owns so many shares of, and then compare it to Cramer's mentions of CNBC over the same timeframe.

What do you think... does Cramer have a conflict problem?

Tweet us @LikeFolio

EDIT:  Jim Cramer responded to this post with the following

U paid to generate this drivel? People didn't like me linking to a paid site, http://t.co/7VCNyA5T5g where i blog. Focus chief @LikeFolio

— Jim Cramer (@jimcramer) December 8, 2014

It's not hard to understand why Net Neutrality is a popular concept:

People do not like or trust their internet service providers. Look at the tweets about Time Warner Cable and Comcast... these companies get lots of social chatter for all the wrong reasons.

People really like the content creators and tool-makers of the internet.  Just look at how positive the typical tweet is about Google or Netflix.

Therefore, legislation that regulates the providers in favor of the creators is going to have popular appeal right away.