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You will be Shocked to Know that THESE Celebrities can Influence the Stock Market!

Trade & Markets

Not too long ago, Kim Kardashian West took to Twitter to report the untimely death not that of a family member, as all members of the Kardashian-Jenner clans are in good health. Kim’s meltdown was due to the demise and unavailability of her beloved Blackberry Bold.

It was 2014 when Kim stockpiled Blackberry’s 2011 phone due to her being swept away by its tactile keyboard. But the phone was unavailable on eBay and Blackberry could not offer her a suitable replacement. The company confirmed earlier that year that they would focus on Android phones, and refrain from releasing a newer version.

The Oprah Effect?

Some not-so-good news for Kim turned into very good news for the investors in Blackberry when their shares traded slightly higher ($7.78) on the day of Kim’s public meltdown.

Kardashian’s crisis may be the most recent, but is far from being the most profound example of celebrities influencing stock markets. In October, 2015, Oprah Winfrey announced buying a 10% stake in Weight Watchers. The media magnate invested her own $43 million in buying new stock shares, lauding the popular diet company for showing her a very sensible way of managing and controlling her weight. Soon after this announcement, investors saw their stock value increase 92% within only a few days. By the end November 2015, the stock value was worth $27.76 per share, a 279% increase from the low point of $6.79, before Winfrey’s announcement.

Can Tweets affect Wall Street!

Celebrity involvement with brands is not new and celebrity testimonials influence almost everything from the cars we drive to the music we listen to, and it does not shock us to know that the same effect would continue for the stock market. Even a simple tweet from an influencer may affect stock prices, sending brand-new investors jumping into day trading. What do finance pros learn from such anecdotes? A social media existence is not optional today and it’s almost a requirement nowadays to legitimize and expose yourself to this digital world, and also hand you some competitive advantage. If you use social media strictly to broadcast content, you miss out on major opportunities to develop relationships and stay abreast of social trends in the media and also the stock market.

Forbes published a list of Twitter’s most followed celebrities last year with Katy Perry topping the list, with 71.4 million followers and since then, she has accumulated around 20 million. Kardashian West also has half that following, with only 47.1 million. Any involvement from such powerful influencers could cause investments to sky-rocket for investors lucky enough to hold those investments, before that critical tweet.

Getting into the game

Finance professionals cannot predict correctly every market fluctuation perpetrated by celebrity influences on social media, but they can ensure staying on top of trends to explain jumps and dips in the market or predict having reached a high point. In 2013, Daniel Gross suggested that when celebrities begin talking about stocks, it is time to start walking away from the market. His proof being yet another Kardashian tale. In 2012, Kim Kardashian re-tweeted an article which predicted Apple becoming the most valuable company in history. Weeks later, the stock began an inexplicable 37% downward slide, effectively losing its spot as the most valuable company in history in a matter of a few weeks. What we can learn is that celebrity product endorsements are good but celebrity stock advice equals a sure disaster!

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