Stardom and Stocks: Exploring the Influence of Celebrities on the Stock Market

April 16, 2024 0 Posted By Kaptain Kush

Over the years, plenty of examples of celebrities have influenced a stock price. Whether intentional or not, celebrities have the power to cause big swings and changes in the stock market. 

In today’s article, we will explore some fascinating times when some of your favorite celebs had a direct impact on the price of a company, with some more lucrative than others.

Elon Musk: Bitcoin, Tesla Shares and Dogecoin

Elon Musk is no stranger to making billions of dollars from companies and the commodities they have offered. However, with great power comes great responsibility, and the South African-born entrepreneur’s antics online can cause massive shifts in stock prices. For example, Musk wiped nearly $14 billion off the value of his own company, Tesla, in May 2020 after tweeting that the share price for the company was too high. This outburst didn’t just cause investors pain worldwide but also wiped about $3 billion off Musk’s stake in the electric car company.

Musk has also had a couple of bouts with cryptocurrencies online. The billionaire announced that Tesla would no longer accept Bitcoin as a form of payment due to the environmental costs it causes, something which caused Bitcoin’s price to fall by more than 10%. However, it’s sometimes been bad news for Musk, especially his announcements regarding the fluctuations in the markets they operate within. Thanks to Musk’s support of the meme coin Dogecoin, the coin’s price has risen from mere fractions of a cent up to around $0.46.

Kylie Jenner: Snapchat Shares and Social Media Mayhem

One of the most well-known celebrity stock market influences in recent times is Kylie Jenner and her shaming of Snapchat, the instant picture-sharing app. In February 2018, Jenner, who is part of the world-famous Kardashian-Jenner clan, announced to her millions of followers on Twitter, “So, does anyone else, not open Snapchat anymore?” Jenner quickly followed up the Tweet, saying she loved the app. Nevertheless, the influencer single-handedly profited around $1.3 billion from Snapchat market capitalization.

It took until around 2020 for Snapchat shares to stabilize following this outburst, and it was one of the first examples of how a celebrity’s opinion on something on social media can affect a company as large as Snapchat. Despite this, you can’t entirely blame Jenner for the app’s decline at the time, with multiple users being dissatisfied with the direction in which Snapchat was going. That said, the company has made a massive rebound in recent years with its influencer affiliate program and is currently trading at $11.00.

The Trump Effect: Donald Trump’s Influence on the S&P 500 and Boeing

Investors who see the former president making announcements regarding the S&P 500 or any stock market news would likely be looking to make instant withdrawals from their portfolios. While it is expected for presidents to rock the stock market occasionally due to the apparent nature of their job, none did so through social media platforms like Trump, in particular, X (formerly known as Twitter). Trump doesn’t use social media anymore, having been banned and now having an inactive account; nevertheless, during his presidency, he loved it.

In this case, Trump tweeted about Boeing in December 2016, stating the company’s costs were “out of control” for a new Air Force One commission and that he would cancel the order. As you know, the previous tales of celebrity stock market influence caused Boeing’s shares to tumble dramatically by $2 per share, ultimately making the company’s market capitalization fall by $1 billion.

Dave Portnoy: The SafeMoon Fiasco

The lesser-known name on this list, compared to the other three giant celebrity statuses, but BarStool’s president Portnoy managed to cause a big stir. Portnoy has been known to livestream his trading activities, sometimes making profits but sometimes not. In this case, Portnoy chose X (formerly known as Twitter) to announce that he had taken a stance in the cryptocurrency market and would be buying $40,000 of the SafeMoon coin. 

Following this announcement, SafeMoon’s coin value raised around 20%, taking the coin market cap above $5 billion; it had stood at $4.5 billion before Portnoy’s tweet, again highlighting the power of an influencer on social media. It’s important to note that the SafeMoon coin went defunct in 2023, again highlighting the volatile nature of the cryptocurrency markets and how investors must do thorough research before making informed investment decisions.

Final Thoughts: Should We Trust Celebs and Stocks?

The simple answer is no. While some of the celebs on this list have amassed fortunes and can operate in the stock markets, their advice isn’t professional. As you have seen from the tales above, celebrities’ stock market advice or even comments regarding companies can result in significant shifts, potentially negative ones. So, always do your due diligence and thoroughly research any companies on the stock market before investing in them.

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