. >> in 2011, paul hutton, an english entrepreneur and johan boll an, an indiana university pressor, claimed to have found a formula that would mine twitter. hailed as revolutionary. >> social media enabled to us take a large set of data from a large audience that we couldn't really do before. and it needs a lot of refinement and used in the right way, but certainly -- certainly really interesting from our point of view, the results are astounding and we don't really understand why. >> reporter: but not understanding why it works was just too risky for investors. their twitter hedge fund csed just a month after it oped. >> the president was fine, i was just with him. >> reporter: the ap twitter hack illustrates exactly why inves r investors have a right to be cautious. markets went into free fall after false reports of explosions at the white house. >> it's about as much about trying to predict how the market will move off a certain story and many times, independent where it came from, people jump on board too quickly to sell or buy something in response and many times it's the wrong