You have likely heard the phrase, “don’t believe everything you read on the internet” but this could not be less true with online stock advice. The internet and social media have proven themselves to be worthwhile financial tools if used correctly and have left many with hefty profits in the stock market. Its recent successes in making people rich should make you consider adding social media to your repertoire of investment advice.
Recently it seems that everybody is talking about their favorite stocks and cryptocurrencies. There appears to be a new frenzy in the market every few weeks where people are giving advice to buy the latest trendy stock. Businesses promoting investment education are being advertised everywhere to capitalize on this surge of interest. Sports pages on my Instagram feed have been reporting the recent news in the stock market. Why has this been happening?
The internet, and more specifically social media, have provided everyone on the planet with an effortless way to communicate, express ideas and post funny dog pictures (the last one ties in later).
One popular social media site is Reddit, a social media platform that acts as a board where people with similar interests congregate on subreddits to express themselves. There is a subreddit for everything including sports teams, video games and most relevant in today’s news: investment advice.
Introducing r/WallStreetBets, a subreddit where people discuss everything stocks. From advice, to stories of riches, to the newest way to exploit the market, this board is filled with people who share a passion for trading.
You have likely heard of r/WallStreetBets in recent news. At the beginning of 2021, a large group of Redditors collaborated to hike up the price of the stock of GameStop which is quickly becoming an obsolete service. They opposed the big investors who bet on the company to die and pumped it full of money, raising its stock by 8,000%.
The anonymous people of Reddit felt motivated by the unfair chance that the average person gets in the market and decided to strike back on the wealthy investors. This caught wind on other social media sites such as Twitter where people continued to drive up the price and make themselves rich.
This all ties into Elon Musk, who needs no introduction. If you want to make money on the stock market, follow the Tesla CEO’s Twitter page. His one-word tweet that said, “Gamestonk” drove up GameStop’s price even more.
A new craze has recently introduced itself into the market that originally started as an internet joke. “Dogecoin” is a cryptocurrency named after an internet meme and was once worthless. According to Yahoo! Finance, on January 1, 2021, a share of Dogecoin was $0.0047 but that was soon to change.
Musk made a series of tweets throughout April and finally the now dubbed “Doge Day” April 20, 2021, Dogecoin spiked to $0.4084 (Yahoo). This led to people who held onto this worthless digital coin surge in wealth and gave DOGE the ranking of seven on the largest cryptocurrencies according to Coin Market Cap.
Although Musk’s influence greatly impacted these two stocks as well as the entire stock market, ultimately it was the anonymous people of the internet who banded together to raise stock prices to benefit the commoners. It is clear that simply following Musk’s Twitter or browsing Reddit has made many rich and it does not seem like its momentum is slowing down. Keep an eye on your social media platforms because the next frenzy of trading could come at any moment.