Who Are The Social Media ‘King-Makers’?

August 26, 2021

Chat forums – Reddit and Discord

 

Chat forums like Reddit and Discord have made it easier for retail investors to gather with likeminded people who share their appetite for risk or strategy. With group names like “Stock Dads Discord”, “Options Trade Club” or “Wallstreetbets”, these informal gatherings have quickly gathered momentum, even triggering local ‘copycat’ platforms on smaller global markets like Reddit’s “JSEbets”.

 

These short-form discussion groups make it very easy to share information and the more convincing the information, or the more influence the person who is sharing it has on that particular forum, the quicker it will gain favour and start to create momentum.

 

Wallstreetbets is now made up of 10.6 million people and was a catalyst behind the massive surge that very nearly broke the market during the GameStop frenzy.

 

 

 

 

Traditional Social Media – Twitter

 

As far as retail investors are concerned, Twitter has become the established news network of our day. Once a piece of news has leaked out of the focused investor groups and subreddits and made it onto Twitter, it’s very much gone mainstream. If it’s worthwhile, it will get noticed by heavy hitters and investment ‘influencers’ who have the power and the leverage to sway even more retail investors, traders, analysts, and of course the ‘old school’ mainstream media brands.

 

The impact of large-scale influencers on social media is undeniable. For example, when Elon Musk tweeted his now infamous one word post “GameStonk” to his 57 million followers, the price of GameStop shares immediately rallied over 60% in after-hours trading, having already closed 92% higher on the day.