Effect of celebrities?
Was just scrolling through twitter when an article about Rihanna causing a $800mil slide on snap's stock popped up. Turns out an ad on snapchat took the piss out of her domestic abuse case and in turn she told people to delete snap. Kylie Jenner apparently also sent a tweet before dissing snap, eventually causing $1bil lost in snap's market cap.
How much of an effect do celebrities or "opinion leaders" actually have on the stock market?
Imagine getting a whole bunch of celebrities to tweet shit about a company, wonder how that's gonna turn out hmmm..
Based off that example, I would say a lot.
Celebrities are great "influcencers" (sic), mainly because people are feel they identify with them based on one or two aspects of their life. That's why they are used for advertising, or voice overs in movies where you can't even tell its the person. Think about all the stuff people won't buy or watch if it was the exact same show or product without the person. Would "The Voice" work with random producers?
Case in point, remember the Shark Tank episode where the guy was trying to sell the rubber band or hold your money, but called it the broccoli band or something. Catch was, the presenter had one of the Sopranos guy as the spokesman. Barbara bought into it, solely on changing the name to the Vinny Wad.
I think you have to keep the context in mind here. If Kylie Jenner says she's never driving a Ford again, I don't think $F moves at all. Snapchat, however, is a social app. That's all it is. You follow your friends, and if you care about these things, celebrities. So if a celebrity quits an app or talks poorly about a business where they have an outsized impact on that business's success, it has an actual impact on stock price.
I'd also like to point out that 71% of Snap chat users are under 34 years old and 45% of Snapchat's user base is 18-24 years old. This young age group would be more likely to care about what Kylie Jenner has to say than someone who's 40.
Has relatively little to do with it in my opinion. Rihanna saying Snap sucks, is the equivalent of Buffet saying the balance sheet of company X sucks. The average age of an investor is higher, yet the impact of Buffet will probably be much higher. Pretty interesting for an audience which is supposed to be more intelligent, independent, mature and rational than the average snapchat user.
You guys are too naive. It's more likely than not that a (huge) short seller paid Jenner to post negatively about $SNAP. They profited massively, and kicked some back to her through the use of 3rd party accounts / moles.
Learn to be slightly more cynical. You'd see the truth more often.
Just making sure: this sort of market manipulation is illegal, right?
It most likely has to be. Otherwise, someone could tell a person with the most Facebook/Instagram followers to say Facebook and Instagram are worthless, and then pay that person after profiting themselves similar to what MonacoMonkey said. I'm pretty sure it's illegal to cause a stock to go down and then bring the price up again to profit (assuming that you have the capability to do such a thing).
It's probably not illegal to be honest. It would be an interesting case for the SEC to make that a person had a reasonable expectation that their opinion on a company would drive the share price. They make that argument for equities analysts all the time. That's why the analyst has to disclose if anyone in his family owns the stock. But Kylie isn't an analyst, and I can make a pretty convincing argument that she doesn't know shit about the markets.
That said, she knows the impact she can have now. Rihanna did the same thing, by the way. I wonder if it would be a securities violation if Rihanna talked shit about Snap, bought the stock on the dip, then went back out to her fans saying she loved Snap after talking to their team (since Snap would definitely reach out to her if she wiped out $800 million in value again), and sold after the recovery.
Short sellers talk shit about stocks all the time, and they have a vested interest in them tanking. PMs talk up their portfolios literally every time they get the chance to do so. Rihanna might lose her market power at any moment. She doesn't know with certainty that her words will hurt or help a stock, so there is still risk in making her trades. And I'm not sure that knowing she later intends to recant her negative position on the company counts as 'insider information' or 'material non-public information'.
If a case were brought, I think a lawyer would argue that her influence doesn't preclude her from trading, that her opinions are just that (opinions, that is), and that she bought some shares on the dip to show confidence in the business, and get people to stop shorting a company she likes.
That's not a case the SEC wants to prosecute. It's too messy.
A good example of Bill Ackman, when he shorted both MBIA and HLF he made numerous public presentations and presentations to the SEC. Basically, he was trying to reaffirm his own trade with his connections.
say that's true, imagine if they film the meeting/arrangement and put it on keeping up with the Kardashians, will probably make the show a lot more interesting
Agree. Will start watching Keeping Up With The Kardashians if this ever happened more often on the show.
That could be true... then again the new update was crap and it's way more likely that didn't happen.
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