Day Traders Have Sent Certain Stocks Through The Roof
As the pandemic began to drag into summer trading by individual investors began to hit all time highs. Online communities began to form on platforms including TikTok, Twitter, YouTube, Reddit, Instagram, Facebook and messaging platform Discord. Through these investors ideas and trades certain stocks were propelled to triple-digit or bigger gains in 2020.
“People fall in love with [some stocks] and they get in these echo chambers, where they are all shouting, like, ‘We’re going to buy Tesla forever!’” said Blake Bassett, a 31-year-old delivery driver who began trading several years ago. “People post all day like it’s a football game.”
Shares of Chinese electric-vehicle maker NIO Inc. has become a darling of i__ndividual investors__, folloowing in the footsteps of companies like Plug Power Inc. and Tesla. Video snippets under the tag #nio have accumulated more than 33 million views on the social-media platform TikTok, Twitter says mentions of it went from nearly 6,800 times on a single day in November to about 100 mentions a day at the start of 2020.
To fully understand what NIO has done, it is the second-most actively traded stock in the U.S. market over the past year, with about 111 million shares changing hands on average each day (Apple was number 1 with a market valuation more than 20 times that of NIO). NIO was priced at under $4 at the beginning of 2020, NIO currently sits at 62.43 a share.
Gavin Mayo, a 19-year-old student at the University of North Carolina at Chapel Hill, says he typically spends anywhere from one to five hours a day on social media while also producing video content for his 60,000 TikTok followers.
“If there’s some really good stocks out there—usually people are talking about it,” said Mr. Mayo, adding that he recently sold 100 shares of NIO for about a $1,600 profit after they rallied more quickly than he expected.
As of January, posts tied to #stockmarket had garnered over 800 million views on TikTok, more than triple the figure in June. Reddit’s infamous WallStreetBets forum has more than doubled in subscribers since the start of 2020. StockTwits, a social network focused on investing and trading, has seen its user numbers more than triple over the past year.
Georgina Allen, who is 26, waded into stock and options trading after two of her friends convinced her to join a Discord server dedicated to trading.
“We actually would join like a Zoom call, and we would live-trade together. And that was pretty much my life,” said Ms. Allen.
“Just seeing other people’s success, normal people like me, and not like institutional traders, was really motivating,” Ms. Allen said.
“Everybody only posts the wins,” said Anthony Denier, chief executive of Webull, a brokerage that is popular with younger investors. “Nobody sends a selfie on Instagram when they just woke up after a bender. It’s when they’re having their first cocktail for the night and they’re all done up. It’s the same for day traders” posting their profits and losses.