A growing number of people are turning to social media to share information and questions about investing. For example, Reddit is a news “aggregator” and discussion forum that allows people to ask questions and share opinions about thousands of topics. There are even “subreddits” for personal finance and investing. Recently, some investors use the subreddit site r/wallstreetbets to encourage investors to buy stock issued by GameStop. The result: GameStop’s stock price that had been as low as $18 a share at the beginning of 2021 increased to a high of $483 a share. Because of the unusual price movement, some investors made huge profits, brokerage firms changed the rules for investing in the stock, and the United States Congress held hearings to investigate if there was a need to increase regulation of the financial markets.

Assignment

1. Do you think peer-to-peer personal finance and investment social media websites are valuable? Why or why not?

2. How would you judge the information that is obtained from peer-to-peer collaboration when it comes to investing your money or managing your personal finances?

3. Should investors that use social media to “pump up” a stock’s price be allowed to profit when the share price increases?