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New York
CNN
—
Reddit investors have been the butt of many jokes over the last few years, but could these much-maligned meme traders have the last laugh?
A surprising new survey finds that 58% of institutional investors — the professionals who trade on behalf of banks and pension funds, the so-called “smart money” — admit to having made an investment decision based on information from Reddit.
Of those familiar with the popular, gossipy social media site, 46% of those polled expect to use the platform more in the next year and about 50% considered Reddit to be of “high importance” in stock evaluations, reported the Brunswick Group. Institutional investors also cited Twitter and TikTok as helpful platforms for investing research.
This radical shift in information-gathering comes as a pandemic-era influx of retail investors, day traders and outright amateurs revolutionizes the way Wall Street functions.
What’s happening: Retail investors are pouring a record $1.5 billion per day into the stock market, according to data from Vanda Research. Corporations are paying attention, and so are institutional investors. As Main Street traders’ gain sway over markets, it has become increasingly important for professional investors to keep abreast of what they’re up to.
“Institutional investors are encroaching on traditionally retail-oriented online spaces,” wrote analysts at Brunswick. “This increased interest in retail investors could be a consequence of the financial fallout from popular ‘meme stocks’ like GameStop, AMC, and Bed Bath & Beyond as institutional investors look for ways to keep their…
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