The Impact of Social Media on Investing

Home  ›  Business  ›  The Impact of Social Media on Investing
Complex web and social media design made easy with DesignBro
The Impact of Social Media on Investing
March 10, 2021 Comments Off on The Impact of Social Media on Investing Business, Social Media Ritika Ghost Content Writer

Whether it is an influencer on Reddit or YouTube or professional traders and institutions on Linkedin and Twitter. Social media’s impact on investing is undeniable. However, before you jump on your favorite platform to get advice. Make sure you know what you are doing.

The GameStop Drama


GameStop sells video gaming equipment at retail outlets and online. Analysts had long regarded it as a declining stock. Suddenly in January this year, the stock took off. Its price increased more than 7,200 percent in one year.

What caused this unprecedented leap in the stock price? A Redditt thread (r/WallStreetBets) with 3.1 million subscribers. When influencers touted the stock. Readers rushed to buy GameStop. Subsequently, other platforms saw increased postings on the stock.

Sprout Social, a social media management and optimization company, tracked mentions on social media. It found 1,582,000 Tweets and 1,465 YouTube videos about GameStop from January 20 to 27. Sprout Social concluded there was a direct relation between social media mentions of GameStop and the rise in stock price.

Social Media Impact on Investing


The surge in the price of GameStop was unprecedented. However, the social media impact on investing is not new.

The Securities and Exchange Commission began allowing publicly traded businesses to report news and earnings reports on Twitter in 2013. The result was an increased flow of information directly to investors. Consequently, it also had unintended results.

At a 2016 American Diabetes Association conference. Attendees were told of a diabetes drug from Novo Nordisk. The information was supposed to be confidential but was posted on several Twitter accounts. Investors who jumped on Novo Nordisk stock had a rude awakening the next day. The stock fell on news its diabetes drug was less effective than hoped.

Also Read  The Difference Between Business Intelligence And Data Analytics

Social media as an indicator of investment success

Sometimes it is not financial information or recommendations that move a stock.

A prime example is the swell of interest in the movie The Hunger Games. Some investors noticed a large increase in hashtags related to the books. As a result, when Lionsgate acquired the movie rights. These investors bought shares in the company.

In its opening week, March 2012, The Hunger Games movie grossed $152.5 million, the third-largest at that time. Lionsgate stock jumped 77 percent.

Institutional investors using social media

A recent study found 80 percent of institutional investors use social media in their work. And 30 percent say that use has helped them make an investment decision.

The study, Institutional investing in the Digital Age: How Social Media Informs and Shapes the Investing Process, was done by Greenwich Associates. They surveyed 256 corporate and public pension funds, insurance companies, and other institutions in the United States, Europe, and Asia.

“These results show that social media is influencing decisions that can result in the allocations of billions of investment dollars around the world,” says Dan Connell, Head of Market Structure and Technology at Greenwich Associates and author of the study. “With approximately 40% of the institutions globally expecting to increase their use of social media in the coming year, we’re projecting a further, rapid increase of social media influence in institutional investment markets.”

Dangers of social media’s impact on investing

As the Greenwich study shows. Most institutional investors get and provide their information through Twitter newsfeeds and LinkedIn. Likewise, more novice investors are turning to Reddit and YouTube for information and recommendation.

Also Read  Top Free Invoice Tools for Freelancers

The criticism of investment advice from Reddit and Twitter contributors with names such as Roaring Kitty, Fage 138, and SaintHakop, is that their information may be speculative and based on emotion instead of value.

Forty-eight percent of those surveyed by Greenwich say the social media information prompts them to conduct further research instead of acting on impulse.

After hearings on the GameStop run-up, Democratic congressperson David Scott said that kind of social media investing is, “a threat to the future of our financial system”.

Tags
About The Author
Ritika Ghost Content Writer I am able to published fiction, nonfiction, article and grant writer with over five years of experience. In articles have covered everything from business IT, to Pagan practices, to self-help, to various academic subjects. I blog on a variety of subjects, from spirituality to chronic illness. In fiction I cross genres quite easily and have published several speculative fiction stories. I am also an experienced ghostwriter and helped a large homeless healthcare nonprofit renew their grant yearly for over a decade. I am organized, flexible, and have never missed a deadline. References available.
Posts You might like
THE IMPORTANCE OF SOCIAL MEDIA MARKETING IN TODAY’S DIGITAL LANDSCAPE May 1, 2023
the impact of social media on business research paper,positive and negative impact of social media on business,impact of social media on business essay,impact of social media on business pdf,positive impact of social media on business,impact of social media on business ppt,positive and negative impact of social media on business pdf,impact of social media on business communication,impact of social media on business pdf,impact of social media on business essay,impact of social media on business ppt,impact of social media on business communication,positive and negative impact of social media on business,the impact of social media on business research paper,the impact of social media on business performance,the impact of social media on business performance 2024,the impact of social media on business,the impact of social media on business performance pdf,the impact of social media on business research paper,the impact of social media on business in 2023,the impact of social media on business growth and performance in india,the impact of social media on business performance 2023,the impact of social media on business and ethical practices in dietetics,what is the impact of social media on business especially in the philippines,the negative impact of social media on business,positive impact of social media on business,positive and negative impact of social media on business,how social media has changed business communication,the impact of social media on business performance,how social media affects business negatively,social media and business growth,impact of social media on business pdf,impact of social media on business essay,how social media affects business negatively,impact of social media on business pdf,social media and business growth,impact of social media on business ppt,how social media has changed business communication,positive and negative impact of social media on business,how social media has changed business,how social media has changed business communication,how has social media changed the environment for business firms,discuss how communication in the business world has changed with social media and mobile devices,has social media changed the way how business release or disclose information,how has social media changed the environment for business firms quizlet,how social media has changed traditional business models,how has social media changed marketing for business,how social media has changed the way of business,how media affect social change,how has social media changed the way businesses measure consumer behavior,impact of social media on business,positive impact of social media on business,positive and negative impact of social media on business,impact of social media on business pdf,impact of social media on business essay,negative impacts of social media on business,impact of social media on business communication,positive and negative impact of social media on business pdf,,positive and negative impact of social media on business,how social media affects business reputation,negative impact of social media on business essay,negative impacts of social media on business pdf,10 negative effects of social media on society,examples of social media hurting business,positive and negative impact of social media on business pdf,negative effects of social media marketing,examples of social media hurting business,positive and negative impact of social media on business pdf,10 negative effects of social media on society,negative impact of social media on economy,positive and negative impact of social media on business,negative impact of social media on business essay,how does social media affect negatively,how social media affects negatively,what is a negative impact of social media,how can we solve the negative impact of social media,social media negative effects on business examples,impact of social media on business ppt,advantages and disadvantages of social media in business essay,impact of social media on business pdf,positive and negative impact of social media on business,positive impact of social media on business,impact of social media on business communication,the impact of social media on business performance research paper,impact of social media marketing in uk,impact of social media on business ppt,impact of social media on business pdf,positive impact of social media on business,conclusion of social media in business,advantages and disadvantages of social media in business essay,positive and negative impact of social media on business,negative impact of social media on business essay,impact of social media in a business,why is social media for business important,the impact of social media on doing business,what are the impact of using social media,what are impact of social media,what is the impact of using social media,what is the impacts of social media,impact of social media essay,impact of social media on society,impact of social media in our life,impact of social media on students,10 positive effects of social media,positive impact of social media,impact of social media on youth,impact of social media pdf,impact of social media on society,impact of social media in our life,impact of social media essay,positive impact of social media,impact of social media on youth,impact of social media on students,what is the impact of social media on the constitutional right to privacy,what is the impact of social media on the constitutional right to freedom of expression,what is the impact of social media on racism sjd1501,what is the impact of social media in our daily lives essay,what is the impact of social media on racism assignment expert,what is the impact of social media on privacy,what is the impact of social media on society,what is the impact of social media on youth,what is the impact of social media on students academic performance,what is the impact of social media on mental health,impact of social media on society essay,10 positive effects of social media,positive impact of social media on society,impact of social media on youth,disadvantages of social media,positive and negative effects of social media on society,impact of social media in our life,10 negative effects of social media on society,impact of social media on society essay,impact of social media in our life,10 positive effects of social media,impact of social media on society essay pdf,10 negative effects of social media on society,negative impact of social media on society,what is the social impact of facebook,what is the impacts of social media,what is the impact of using social media,how do social media affect you socially,what is the social power of social media,impact of social media on business ppt,impact of social media on small businesses research paper,impact of social media on business communication,positive and negative impact of social media on business,impact of social media on business pdf,positive and negative impact of social media on business pdf,impact of social media on business essay,social media and business growth,impact of social media on business pdf,impact of social media on business essay,positive and negative impact of social media on business pdf,social media and business growth,positive and negative impact of social media on business,impact of social media on small businesses research paper,what is the impacts of social media,what is the impact of using social media,impact of social media in bangladesh,social media benefits for business,how can social media help a business grow,5 benefits of social media marketing,how businesses use social media for marketing,social media benefits for small business essay,benefits of social media for students,disadvantages of social media for business,benefits of using social media,social media benefits for business,5 benefits of social media marketing,benefits of using social media,what are the 10 benefits of social media,benefits of social media for students,social media benefits for small business essay,which of the given are the benefits of using paid social media advertising for a small business,social media marketing benefits for small business,which social media for small business,using social media for small business,how can small business use social media,benefits of social media marketing for small businesses,social media benefits for organizations,does social media help small businesses,importance of social media for small business,social media costs for small business,positive and negative impact of social media on business,negative impacts of social media on business,positive and negative impact of social media on business pdf,impact of social media marketing on small business,benefits of social media for individuals,impact of social media on marketing research,the impact of social media on business performance,impact of social media on business essay,impact of social media on business essay,impact of social media on business communication,impact of social media on business ppt,impact of social media on business research paper,positive and negative impact of social media on business,negative impacts of social media on business,positive and negative impact of social media on business,positive and negative impact of social media on business pdf,impact of social media on business essay,why is social media for business important,what are the positive impacts of media,the impact of social media on doing business,how can we solve the negative impact of social media,what are the impact of social media on communication,impact of social media on work,positive impact of social media on organizations,what is the impact of social media marketing,positive and negative impact of social media on business,positive and negative impact of social media on business pdf,the impact of social media on business performance,impact of social media on business essay,what are the 10 benefits of social media,impact of social media marketing on small business,role of social media in business communication pdf,benefits of social media for individuals,impact of social media on business essay,impact of social media on business ppt,impact of social media on business research paper,social media and business growth,positive and negative impact of social media on business,positive and negative impact of social media on business pdf,positive and negative impact of social media on business,positive and negative impact of social media on business pdf,impact of social media on business essay,why is social media for business important,what are the positive impacts of media,the impact of social media on doing business,how can we solve the negative impact of social media,what are the impact of social media on communication,impact of social media on work,positive impact of social media on organizations,what is the impact of social media marketing,
The Impact of Social Media on Business September 7, 2021
5 Tips to Rule Over Instagram and Make Money
Why Your Business Should Have an Active Social Media Presence January 27, 2021
Influencer Marketing Report 2020 for India
Boosting Your Online Marketing Through Social Media Quotes December 30, 2020