Social media has an unprecedented sway over stock prices.
Financial influencers give stock advice on YouTube and TikTok. Trading communities on X and Reddit resurrect financially undesirable stocks from their ashes just for the sake of memes. It’s undeniable that a growing subset of investors are adamant on using platforms like X, Reddit, YouTube, and TikTok to make their financial decisions. The X-based finance community even has a name for themselves: FinTwit.
Popular online brokerage Robinhood has decided to take advantage of that. The company announced on Wednesday that it will be adding a social media feed to its mobile app.
Called Robinhood Social, the feed will allow users to post the trades that they make and follow along with other traders, including famous investors and members of Congress. These public figures are of course not all on Robinhood, but their publicly-reported trades will be posted via avatars. Users will be able to share trades in stocks, crypto, options, and other assets.
“We’ve heard from active traders that they rely heavily on social media to navigate the markets. But it’s harder than ever to understand what’s real and what isn’t,” the company shared in a press release on Wednesday.
All posted trades will be verified and live, the company said. Users will be able to discuss strategies with each other and see the real-time performance rates of the traders that they follow.
The feed will first launch by invitation only to some American customers early next year with broader availability to follow.
Is this copy-trading?
Yes, but also no. Copy-trading is a technically legal but often scrutinized practice in the U.S. There are many platforms that offer it, most famously the Israeli company eToro, which is available to U.S. residents in most states and allows users to automatically copy the trades of other investors.
In contrast, Robinhood’s new platform doesn’t copy trades automatically. It shows users the trades in real time and the user can decide to copy them manually.
After the regulatory scrutiny it faced in the lead up to its IPO in 2021, Robinhood might be acting extra careful not to raise any regulatory eyebrows.
Before its IPO, Robinhood had to get rid of some features — including a confetti animation that popped whenever you placed a trade — that regulators worried were gamifying and encouraging short-term investing.
CEO Vlad Tenev himself has suggested, as recently as last December, that “copy-trading could become of greater interest to regulators.”
But it’s still significant and shows the power of social media-driven trading that Robinhood will make the jump, despite the potential regulatory risks its CEO deems are on the horizon.
Social media’s stock power
A growing subset of traders rely on social media to make decisions. It has led to the rise of meme stocks, like GameStop and AMC Theaters. The infamous meme stock trader Roaring Kitty led to the “Mother of All Short Squeezes” in 2021 (and another smaller short squeeze in 2024) simply by posting about GameStop stock on X and Reddit.
One post from a public figure with a large following on social media can make a stock spiral down or skyrocket, like when Elon Musk’s tweet expressing his “kinda love” for Etsy in 2021 bumped the stock up. Musk is especially fond of his financial influence on social media, and has utilized this power many times, particularly in relation to his favorite memecoin Dogecoin.
There are obviously many downsides to this. Just because an investor or a financial memelord makes a trade decision, it doesn’t necessarily mean that decision is wise. A financial decision should be made after weighing all the risks, not driven by FOMO.
And not every financial influencer is trustworthy. There have been several notable cases of money laundering and stock manipulation schemes conducted by so-called finance influencers.
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