Retail traders on social platforms like Reddit and Stocktwits can influence stock prices, but almost exclusively with meme and penny stocks.
Prominent individuals with large followings, such as Elon Musk, can also cause substantial price movements with their posts.
An example includes Tesla’s stock reacting to Elon Musk’s tweets and the volatility in the Dogecoin cryptocurrency driven by Musk’s social media discussions.
Reddit’s WallStreetBets has shown that coordinated buying or selling by a large group of retail investors can significantly impact stock prices, as seen in the GameStop (GME) short squeeze.
While social media can amplify news that might otherwise have a limited impact, it’s important to remember that not all information is reliable. Always approach social media’s influence on your trading decisions with a healthy dose of caution.
Christian Harris