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by Graham Cookson
in Big Data , Hadoop , VW , Volkswagen , EPA , Emissions , Cheating , Scandal
on 23 October 2015

trading.co.uk picks up VW emissions scandal before major media outlets

On Friday September 18, 2015, it was revealed by the EPA (US Environmental Protection Agency) that Volkswagen Group had cheated emissions tests in America. It was a shock, not only to American car owners, but to the rest of the world. Volkswagen, arguably one of the most respected car manufacturer brands, was well-known for engineering clean, efficient vehicles - but now it looked like that accolade might have been built on falsities.

As VW Group is the second largest automobile manufacturer in the world, behind Toyota, the fall out from the scandal has the potential to damage the reputation of not only VW badge holders, but also many other highly-reputable brands: Audi, Bugatti, Bentley, Lamborghini, SEAT, Scania and Skoda marques - all of which Volkswagen Group own.

The announcement came as a shock to all, with VW Group's share prices dropping dramatically as the full extent of test cheating was revealed; approximately 1.2 million vehicles affected in the UK alone, with more than 500,000 vehicles in the US and up to 11 million vehicles worldwide.

However, what if you could have seen the scandal unfold before the majority of people found out about it?

Spotting the trend before others

Between 3-4PM (BST) on the Friday, trading.co.uk’s pulse charting system saw a notable increase in relation to VW Group, with the platform’s Word Map showing increased references to the words: “Volkswagen” “recall” “cheating” “scandal” “EPA” “tests” “pollution” and “emission”.

It wasn’t until 5pm BST (12PM EST) when most high-profile media outlets, such as the BBC, Reuters and LA Times started reporting on the story. At market close on Friday September 18 (5:30pm – BST) VW’s stock was at 161.55.

By market open, after the weekend, on Monday September 21, VW’s stock had dropped to 135.45 - a fall of 26 points. Since then the price of VW has continued to fall, fluctuating dramatically as it does so - where previously it had held a steady pattern of highs and lows (fluctuating naturally with the markets).

VW emissions timeline (note: all times in BST):

  • Friday Sept 18, 2015 
    Friday September 18 – EPA reveals that Volkswagen has been cheating emissions tests in the US.

  • 3:00PM:
    trading.co.uk pulse chart for VW begins to show movement.

  • 4:00PM:
    trading.co.uk pulse chart for VW shows notable spike in mentions about the company.

  • 4:00PM:
    trading.co.uk Word Cloud/Word Map, shows growing social chatter around the terms: “Volkswagen” “emissions” “recall” "software" “EPA” “cheating” “tests” "diesel" "pollution" "air" and "environmental".

  • 5:30PM:
    Market closes for weekend. VW share price closes at 161.55.

  • 5:30PM (onwards):
    News outlets begin reporting story about Volkswagen cheating emissions tests.

  • Monday Sept 21 - 9:30AM:
    Market opens after weekend. VW stock opens at 135.45 (drop of 26.1)

Outcome:
If you had been using trading.co.uk as a source for financial information, you would have seen a growing volume of chatter around Volkswagen, in particular on the topic of the company cheating the emissions test, at least an hour before the markets closed for the weekend and before major news outlets began reporting the incident.

These pieces of information found on trading.co.uk first, could have helped a savvy trader make an informed decision to sell stock in VW - seeing a significant saving when the markets opened on Monday and the company’s stock dropped.

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