Estimize's Data Licensing Deal with Bloomberg Validates Social Finance
Estimize, the crowdsourced earnings estimate data platform for buy side and independent analysts, signed a licensing agreement with Bloomberg to feature Estimize’s earnings data on more than 900 publically traded stocks over the Bloomberg Professional services’ news and research feeds.
“This is a really big step for us because it’s a huge validation for our ability to take a very scary and open methodology and make it work and that’s not a simple thing,” said Leigh Drogen, founder and CEO of Estimize in an interview with Advanced Trading. Drogen is a former hedge fund quantitative analyst who founded Estimize in 2011 to improve upon sell-side estimates of traditional Wall Street firms, which many regard as conflicted and inaccurate.
Estimize’s crowdsourcing model for earnings estimates has been more accurate than comparable Wall Street consensus estimate data sets more than 67 percent of the time, and increased closer to 70 percent of the time over the first quarter of 2013, according to the company.
Drogen believes the increased accuracy is driven by the diverse range of analysts contributing on Estimize comprised of hedge funds, institutional buy-side, independent research and independent investors.
Estimize will provide PDF reports of its earnings estimates data and Bloomberg will enter the reports into the research and news feeds which are delivered to the Bloomberg community across more than 300,000 financial professionals. It will also show changes over time in charts that compare Estimize data to the Wall Street consensus mapped over time.
Over the second quarter of 2013, the company expects to expand the universe of estimates to cover over 1,200 publically traded stocks. Also, the addition of Estimize’s earnings estimates data to the Bloomberg will put Estimize at the forefront of the social finance movement, according to the company’s announcement yesterday.
[Bloomberg Integrates Live Twitter Feeds With Financial Platform]
The move to add Estimize’s social-media based earnings data follows a decision by Bloomberg itself to add the Twitter feed to the Bloomberg Professional service. “As far as I know, Twitter is the only open, social data source that is on there. We’re right behind them,” said Drogen.
The move is a sign that social finance is growing and that an established player like Bloomberg is getting out in front of the trend. In response to a question about future partnerships with other data providers, Drogen said he would also pursue similar agreements with other platforms.
“We you think about our goal to become the consensus, we definitely have to be seen through all of these platforms. “
Separately, Estimize is working on enhancements. The company is building algorithms to predict who are going to be the most accurate estimates based on machine learning applied to analysts on the Estimize platform. “These algorithms are kind of our secret sauce,” said Drogen, who declined to say how they worked, except to say they looked at preview accuracy and other characteristics.Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio