Before he even took the oath of office, President Trump and his tweets were making the markets move.
Stocks dipped for Boeing when Trump, as President-elect, tweeted about the cost for the company to build Air Force One, and they slumped again for Lockheed Martin when he called the expenses of its F-35 jet “out of control.” Similar stock drops affected automakers Toyota Motor Corp., General Motors and Ford after Trump railed against all three on Twitter about building vehicles in Mexico.
From afar, the staff of the Texas-based digital marketing firm The Think Tank (T3) — like much of Wall Street — has watched in wonder, trying to figure out what to do about the unpredictable Twitter habits of their next commander in chief.
Then a staffer in T3’s New York office had an idea: What if they found a way to short sell stocks moved by Trump tweets, then used the money for something good? (Short selling means placing a market bet on a share price going down rather than up.)
Within days, “Trump & Dump” was born.
They created an ultrafast Twitter bot and algorithm that follows @realDonaldTrump, reviewing each tweet he sends. When a publicly-traded company is mentioned, the bot triggers a “sentiment analysis,” T3 President Ben Gaddis told The Washington Post, which scans the words surrounding the company name to determine if the tweet has a positive or negative slant.
If it leans negative, the algorithm tells a connected E-Trade account to short-sell the stock — which, if done properly, nets T3 a profit.
All that happens very quickly.
(Think hard before you try this at home. High-frequency traders have reportedly been doing the same thing with automated programs capable of executing thousands of trades in a millisecond. But how effective this could be using a retail platform like E-Trade, which on its website guarantees a 2 second trade execution, is open to question.)
But Gaddis said “it’s been really successful so far,” though he declined to say how much money they had made in the three weeks since it launched. In an explanatory video about the bot, though, T3 described their profit size with a play on one of Trump’s favorite words.
“YUUUUGE,” they said.
And early Monday morning, when President Trump started his day with a tweet referencing Delta Air Lines, the algorithm went to work. T3 made a trade before the stock dropped, Gaddis told The Post, then saw a 4.47 percent return when the short sale was completed.
“The Trump & Dump bot was all over it,” Gaddis said.
T3 is far from the first company to capitalize on Trump’s targeted tweet-storms, made evident by the almost instantaneous market response to his online remarks, analysts told the LA Times in mid January. “It’s in the algorithms,” said Joe Gits, chief executive of Social Market Analytics Inc. “They’ve done it.”
What likely sets T3’s system apart, though, is its beneficiaries.
They wanted the money to go toward a cause that would generate minimal controversy, Gaddis said, so T3 settled on one they figured everyone could get behind: puppies.
And kittens. And whatever other animals the American Society for the Prevention of Cruelty to Animals is caring for these days.
“We didn’t want to pick an organization that was really political,” Gaddis said, “and who doesn’t love dogs and cats?”
When a short sale is made, Gaddis and his team are notified through Slack, a corporate messaging service. They can check the trade to be sure it went smoothly, then collect their profits and donate them to ASPCA.
“THE RESULTS,” T3’s website says, “Tweets Analyzed. Stocks Shorted. Puppies Saved.”
A spokeswoman for ASPCA confirmed that T3 had submitted donations to the animal nonprofit, emphasizing that the organization was not directly involved with the Trump & Dump bot but that “we appreciate their support.”
T3 is investing company money in the endeavor, Gaddis said, and plans to release tracking data on donations in monthly intervals.
Based in Austin, Texas, the company brands itself an “innovation agency,” working with Fortune 500 companies like UPS and Allstate to enhance their digital marketing, mobile applications and website development.
But T3 also works to make brands work for their users — the precise goal of Trump & Dump.
They ask themselves questions like, “how can we make an insight or data like this,” — Trump’s tweets and the corresponding stock market dips — “actionable.”
Thus far, the feedback has been positive, Gaddis said.
“I don’t think companies love it when he tweets about them,” Gaddis told The Post, which is why T3 thought they would try to “use something that most people are upset about and turn it into some kind of good.”
The algorithm only works — and the puppies are only saved — if the president continues to use his Twitter in ways that move stocks.
If that sort of tweeting stops, so do the trades.
But, Gaddis said, “our prediction is it probably won’t.”
More from Morning Mix: