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How Trading.co.uk users saw Merlin plead guilty to health and safety breaches before stock tumbled

It has been a turbulent year for Merlin Entertainment ever since, back on June 2, 2015, Alton Towers (one of Merlin’s top tourist attractions) saw one of the worst roller coaster incidents in recent memory, when a carriage filled with 16 people crashed into the back of an empty carriage on the ‘Smiler’ ride.

Talk of Alton Towers, Merlin Entertainment and the Smiler ride have been appearing on and off in the news and social channels over the last year, as the investigation into how it happened progressed and some of the victims spoke out about the incident and how it affected their lives.

Last year, while we were in private beta, we reported how Trading.co.uk was able to inform users of the incident nearly a full hour before Merlin’s stocks plummeted.

Because even though many news sources are quick off the mark, they are not as fast as social media when live events unfold in the public eye. The incident occurred around 2:00PM and by 2:06PM tweets and other social posts were appearing online describing the incident [see image, right]

A turbulent year
Almost a year on from the crash, on April 22, 2016 Merlin Entertainment pleaded guilty to breaching health and safety regulations over the Smiler ride crash.

The platform monitors online mentions of each company, 24/7, from multiple sources and can detect when the volume of chatter online is just a normal day and when it’s unusually high. Trading.co.uk then alerts users to the fact that something is happening around a company, via its 'Pulse' measurement and, coupled with many other financial components, it enables traders to see deeper insights to support their trading strategies.

Just after 10:00AM, Trading.co.uk picked up the story and alerted traders to the news nearly 30 minutes before media outlets began reporting Merlin’s guilty plea and Merlin’s stock began to slide in earnest.

To help traders understand the unusual online activity for Merlin Entertainment, its ‘Hot Topics’ word cloud showed conversations around “Alton” “Breaching” “Merlin” “Entertainments” “Faces” “Fine” “Guilty” “Pleads” and “Smiler” – all indicating involvement in Merlin’s guilty plea.

By 10:36AM, media outlets had begun reporting the announcement and Merlin’s shares dropped throughout the day from 445.10 on market open, down to 435.30 on close.

Merlin Entertainment guilty plea timeline (note: all times in BST):

  • Friday April 22, 2016
    Merlin Entertainment pleads guilty to health and safety breach over Alton Towers’ Smiler ride crash on June 2, 2015
  • 10:08AM
    Trading.co.uk’s alerting system notifies users of unusual activity for Merlin Entertainment
  • 10:30AM
    Early news sources begin reporting announcement
  • 10:36AM
    Stock in Merlin Entertainment begins to drop, continuing throughout the day
  • 11:30AM
    Majority of news sources revealing announcement

Outcome
If you had been using Trading.co.uk as a source for financial information, you would have seen the alerts and growing volume of chatter around Merlin Entertainment nearly 30 minutes before news outlets began reporting the story and Merlin’s stock dropped.

These pieces of information found on Trading.co.uk first, could have helped a savvy trader make an informed decision before the company’s stock dropped.

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