“Gamestonk!!” Elon Musk, Technoking of Tesla tweeted out an 11- character message to his 49.4 million followers late January. GameStop Corp. shares gained more than 150% overnight. The next day, analysts threw up their hands. Nothing apart from Mr. Musk’s tweet which included a link to Reddit’s WallStreetBets forum could explain why the stock soared.
The ‘Technoking of Tesla’ isn’t alone in affecting stocks by simply tweeting. Public figures as varied as the Tesla executive, venture capitalist Chamath Palihapitiya, Barstool Sports founder David Portnoy and fund manager Cathie Wood have collectively amassed hundreds of millions of followers online. Many of their fans are individual investors who follow their comments on the market.
It is no accident that many of the most prominent stock influencers have embraced antiestablishment views. They have directed their anger at parties ranging from the Securities and Exchange Commission to CNBC to hedge funds and billionaires, often to the delight of their followers. Mr. Portnoy publicly feuded with billionaire hedge fund owner Steven A. Cohen in late January when brokerages restricted trading in GameStop shares, accusing him of being involved with the curbs in an effort to “save hedge funds at the cost of ordinary people.” Mr. Cohen denied the allegations.
“It doesn’t matter what your investment skills are. Because of social media, it’s never been easier to be a promoter” – Ben Carlson, Ritholtz Wealth Management
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