About Sentiment Score

The Sentiment Score is a measure designed to quantify the tone of media coverage about a company, ranging from very negative (-100%) to very positive (100%).

This tool offers a straightforward way to identify major news milestones and track changes in the company's reputation, saving you valuable time.

Click on any point in the chart to access news articles for that particular date!

How Sentiment Is Determined

We use a sophisticated machine learning algorithm to assign a sentiment score to each piece of news we compile about a company. This score is derived from analyzing the article's title and a segment of its main content. When multiple articles about the company are published on the same day, we calculate the average sentiment score, ensuring it is updated daily.

Our model is specifically designed for the Venture Capital sector, with a keen sensitivity to corporate events and fundraising announcements. Below are examples of news articles alongside their corresponding sentiment scores, as determined by our model:

It is important to acknowledge that no AI model is flawless. Occasionally, our model may overreact to certain keywords, leading to inaccuracies in sentiment scores. We continuously monitor and adjust our model to mitigate such instances.

Can Sentiment Predict Growth?

Extensive academic research suggests that news sentiment can indeed predict stock performance in the public markets, particularly in the short term^[1][2][3]. However, the accuracy and breadth of these predictions vary significantly depending on the methodology employed^[4].

In the realm of venture capital, research has begun to explore the application of sentiment analysis. Bajo & Raimondo (2017) find that companies receiving positive media attention experience higher demand at their IPOs and are more likely to see growth on the first day of trading. This effect is amplified when the news is published closer to the IPO date and by more reputable sources^[5]. Tumasjan et al. (2021) demonstrate that there is a limited but significant positive association between Twitter sentiment and start-up valuations^[6].

Ultimately, while a positive media sentiment may indicate a company's potential for success, it is wise to consult additional indicators before making investment decisions. The more information you have, the better equipped you are to make informed choices.

References

• [1] Bollen, J., Mao, H., & Zeng, X. (2011). Twitter mood predicts the stock market. Journal of Computational Science, 2(1), 1–8. https://doi.org/10.1016/j.jocs.2010.12.007
• [2] Heston, S. L., & Sinha, N. R. (2016). News versus Sentiment: Predicting Stock Returns from News Stories. Finance and Economics Discussion Series, 2016.0(048), 1–35. https://doi.org/10.17016/feds.2016.048
• [3] Lopez-Lira, A., & Tang, Y. (2023). Can ChatGPT forecast stock price movements? Return predictability and large language models. Social Science Research Network. https://doi.org/10.2139/ssrn.4412788
• [4] Phillips, L., Dowling, C. P., Shaffer, K., Hodas, N. O., & Volkova, S. (2017). Using social Media to Predict the Future: A Systematic Literature Review. arXiv (Cornell University). https://arxiv.org/pdf/1706.06134.pdf
• [5] Bajo, E., & Raimondo, C. (2017). Media sentiment and IPO underpricing. Journal of Corporate Finance, 46, 139–153. https://doi.org/10.1016/j.jcorpfin.2017.06.003
• [6] Tumasjan, A., Braun, R., & Stolz, B. (2021). Twitter sentiment as a weak signal in venture capital financing. Journal of Business Venturing, 36(2), 106062. https://doi.org/10.1016/j.jbusvent.2020.106062