4.1 INTRODUCTION
There is little doubt that news is very critical for the value of the stock price of a publicly traded company. If nothing else, news is the main mechanism that communicates critical information to the investing public. But, what makes this interesting is that in the USA the way that public companies handle news is heavily regulated.
Why then is it that most of the formulas that are taught in business schools about how to calculate the value of a stock price of a corporation do not involve the value of “news”?
Could it be because this valuable information is not easy to quantify?
This is where systems that estimate the sentiment of news pieces come in to fill a big void. In today's world, where millions of investors are able to trade easily from anywhere just by pressing a “submit” button and where news articles move at the speed of the electron, reaching millions of investors instantly, a news media sentiment system has become a necessity.
To be able to understand the value of the news media sentiment, one would need to have a good understanding of the news landscape, as it relates to publicly traded companies, because all news is not created equal.
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