Twitter Quarrels with StockTwits over Cash Tags $$

by royalarse13

“From ancient grudge break to new mutiny,
Where civil blood makes civil hands unclean.
From forth the fatal loins of these two foes
A pair of star-cross’d lovers take their life”

The announcement that Twitter reclaimed the cashtag [$tag or ‘$’] from StockTwits brought about a unique cocktail of personal feelings.  Upon learning this long-standing agreement was terminated — as an avid user and bull on the company who was fortunate to lunch with CEO Howard Lindzon — it struck me as monumental.

First take for most is something like “Twitter kneecapped StockTwits”.  Others claim that StockTwits is just a copy-cat anyway and they don’t desire cash-tag exclusivity.  Whatever  StockTwits is/was has just been disrupted by Twitter.

The decision to reclaim the cash tag $ is a move sure to incite a saga akin to tortured, passionate lovers abruptly parting ways: intermittent fireworks amid the grinding emotional decay.  With a single conspicuous tweet on Monday night the break-up was broadcasted:

Stocktwits built a community through curation of tweets containing tags like $GOOG, $SPY and $AAPL and combining it with other relevant financial information.  Their tools are top-notch for investment professionals seeking info on stocks, ETFs etc.  An impressive network of professionals generating content fosters a smart culture and pleasurable user experience.

I met CEO Howard Lindzon in Spring 2011, a period encapsulating my search for new professional challenges while coping with my own heartbreak suffered days prior.  It is singularly most intense period of my life.  I hadn’t eaten much in days, sleeping poorly and struggled to reconcile my desire to evolve with yearning for familiarity. Nothing like a meeting with an influential entrepreneur to jostle things into place.

Battling my position in the matrix of modern society I strolled through the rain in Toronto.  With plans to meet for coffee, I sat down nervous, malnourished and wet in a Sushi restaurant across from the CEO of a multi-million dollar tech company. Blankly gazing at the menu trying not to choke on my tongue I demanded a black coffee.

Black coffee, on an empty stomach, in a sushi restaurant.  Howard orders 6 items and looks across the table, “We’ll share.”

Fuck it, let’s do lunch.

The raw fish and general distress caused my focus to be off somewhat, but we engaged on social media, technology, venture capital and investing, the media, and most specifically StockTwits.  What is it, and how can I get involved?

His goals were not modest.  Stocktwits was about the community, its growth potential limitless thanks to effective presentation and curation of cash-tag generated news feed.  Stocktwits attracts a strong demographic increasing the likelihood it could sustain itself with ads, should they avoid being acquired.  He was dialed in on their initiative to become a world-class Investors Relations platform.  Exit strategies? Imagine being worth a fraction of the $20Bil valuation they put on Twitter? Maybe Yahoo Finance places a bid, or a struggling print publication looking for ready-made digital jumps in?  What about Twitter bidding themselves?

What About Twitter?

My gut burned with the niggling idea that Twitter was driving the bus in the whole operation.  Although Howard guarded plans to expand and future partnerships, we acknowledged the plain fact StockTwits — in some form — depended on a 3rd-party source:  Twitter.

With the recent announcement any visions of the utopian scenario in which Twitter is the White Knight Acquirer, have been blurred.  Twitter has chosen to be adversarial, much the way they confronted Tweetdeck when they built upon Twitter infrastructure to improve the user experience.

What about a patent?
If Twitter eliminated the accommodation provided to StockTwits via $ curation, what happens to their business model?  Distressed and beleaguered I do not recall a firm declaration either way on the legal recourse StockTwits may possess should Twitter withdraw their access.    It only percolated to the surface how precocious their venture may be before it was whisked away like the sashimi tumbling into the vacuous gorge that was my stomach.

Now its right in front of their faces.  Twitter dropped a bombshell and broke it off with Stocktwits.  Howard has publicly responded in a blog post here. While this debacle has gifted StockTwits.com a short-term boost in traffic, the end game is unknown.  Can they reconcile, or has their relationship suffered irreparable damages?

Does StockTwits have the stones to look upon the hand that feeds and place a civil action into its grasp? I have no inside knowledge into the outcome, but my suspicion is that legal action is unlikely at this point.  Primarily because of the potential costs of litigation, but alternatively since the response from Mr. Lindzon lacked any indication that a contract, or agreements in principle, had been violated.  It suggests that the original relationship between StockTwits and Twitter was established verbally and not formalized, whatever that means in court…

Lastly, I believe legal action is unlikely because StockTwits is a great product with a strong team that will continue to innovate and deliver.  The site remains up and running with most of its functionality intact.  There is always hope that loves springs eternal, a spark might rekindle their fire, but Howard, Phil and the crew are surely confident they can stand alone and thrive.  Business as usual.