- Danielle Abril
- Staff Writer-Dallas Business Journal
A Dallas startup is aiming to change the way investors and hedge fund professionals analyze the stock market by using the power of social media.
HedgeChatter, a 2013 Tech Wildcatters graduate, is planning to release its analytics dashboard to hedge fund companies in two weeks. The system aggregates and analyzes social media data to offer intelligence about the market.
“We’ve created the first new tech indicator for stocks, which is social media,” said James Ross, CEO and co-founder, adding that stocks are often impacted by investor and consumer confidence levels. “It’s all about people and their emotions.”
HedgeChatter began developing its system about four years ago after recognizing a gap in the market.
“We came together to see if social media was going to play a role in the stock market,” Ross said, adding that the founders studied stock trends. “Things would happen, but we didn’t know why they were happening.”
The group – which comprises CTO Ben Benoy, COO Rob Turkel and chief technical architect Omar Syed – quickly realized that sentiment and rumors played a major role in the stock market’s behavior.
For four years, the team worked to develop an algorithm that not only aggregated the opinions and data, but also weighted them, analyzed them and offered clients’ recommendations on how to manage their stocks.
“We’re basically mining social feeds and correlating them to see if they’re right or wrong,” Ross said. “So when certain people say you should buy a stock, we’re able to determine whether you should listen to them.”
Six local hedge funds are currently working piloting the program in beta testing and plan to become full-fledged clients when the system goes live. The startup also has a trusted board advisor on its side: George Karidis, chief operations officer of Dallas-based SoftLayer, which was recently acquired by IBM.
But beyond rolling out its program for hedge funds, HedgeChatteris also amid developing another dashboard catered to retail investors. Ross said he expects to be able to roll out that system within a month.
HedgeChatter, which tied for Tech Cocktail’s title of Hottest Dallas Startup, was a bootstrapped company when it first formed. It has received funding from Tech Wildcatters as well as angel investment money from Chris Camillo, a Dallas marketing executive who wrote the book “Laughing at Wall Street.”