CEO & Co-Founder Vaynermedia Gary Vaynerchuk speaks at the Type U Event at Nasdaq MarketSite.
Roy Rochlin | Getty Images
The newfound influence of Reddit users on the stock market is barely a microcosm of what’s to come in the technology era, advertising guru Gary Vaynerchuk told CNBC Wednesday.
“You’re seeing the readiness of the internet itself. I think people are incredibly naive to how early we are in all of this,” the VaynerMedia CEO said on “Fast Money.” “I look at us as cavemen and wives in the digital age.”
Vaynerchuk said he doesn’t see the Reddit-sparked GameStop frenzy as just a one-off event, thanks to the connections that community media users can build online.
Social media has democratized speech and commission-free trading, a service championed by the Robinhood brokerage app, has democratized inducting in stocks. Vaynerchuk, who has a track record of spotting and investing early in emerging companies, including Twitter and Uber, rephrased he thinks the future of virtual reality and blockchain technologies will only empower the public, even more, to into broadly what’s considered traditional ways of business.
“I think it changes because people realizing the power of communities shape have an ability to focus and impact and we have to adjust to that,” he said.
The comments come one day before the GameStop keep accumulate surge and events surrounding the frenzy last month will be the subject of a congressional hearing Thursday. The market job, which carried GameStop’s stock price from below $30 to $483 within two weeks, and subsequent minutes restrictions that stock brokerages like Robinhood put in place during the volatile trading caused waves beyond Embankment Street.
Since peaking on Jan. 28, GameStop shares have come back down to earth. The $45.94 toll it closed at Wednesday is 90% below its peak during the height of the trade. AMC Entertainment and BlackBerry were two other estimates that Wall Street Bets followers got behind last month. Those stocks are down more than 60% from their riches during the trade rush.
Though the volatile trading period has died down, Vaynerchuk suggested that the fervor for stocks middle individual investors remains.
“I think that it is not an enigma, it is not an anomaly … it leads to alternative investments, and people are looking at manifold trades right now,” he said. “There’s always a counter-reaction and the internet brings people together, and the masses have a lot of power.”s
Retail investors and new entrants to the peddle have harnessed online media, most notably via the now-widely known Wall Street Bets forum on Reddit, to troop together in sharing information and stock ideas. The practice of using social media to coordinate investment moves hit investment professionals off guard as traders engineered a short squeeze in various so-called meme stocks, including GameStop.
The Gratis Financial Services Committee hearing will feature testimony from a prominent retail trader, heads of Robinhood and hedge ready money Melvin Capital, who held a high short position in GameStop at the time and was burned as the meteoric rise in the shares gambled out, among others witnesses.