If she were to short the stock and then posted a tweet is that illegal? Or the inverse if she bought the stock and posted a tweet? It seems like some of these social influencers have a lot of power.
As long as she's not employed/paid by snapchat and trades on her account - no, not illegal at all - she's a private citizen making a public statement with no insider knowledge -- her ability to _affect_ the security is not material (the board or auditors of SNAP _might_ be on the hook if "celebrity disinterest" wasn't listed in the known risks of their last quarterly -- I mean, that seems like a reach, but I'm not a lawyer, judge, securities expert, or fully functioning human being...).
Ethically, it might be nice if she disclosed a position, but she's [presumably] not a financial analyst or advisor, so she's got no duty to disclose.
I mean, if you were president, you could make good money for yourself and your friends just telling them which way you were going to tweet about a company a few minutes before you do -- if you didn't care about the appearance or ethics of it...
If Wall Street/investors are so out of touch that a vacuous tweet of a socialite can have so much effect, to me that’s a different issue entirely. Not to mention one reason this could happen is if the stock price was grossly overvalued in the first place. In general, I don’t see anything specifically illegal about this.
Kylie Jenner has 24.5 million twitter followers that presumably think somewhat similarly to her. I'm pretty sure that her thoughts on this matter are indicative of a larger trend that an investor would be wary to ignore.
A trend is more than one person, and as the article states her situation has recently changed. This is all a sign of pure laziness/hype/greed, instead of doing some actual market research before you make investment decisions. In any case, I’m not sure how much of her “thought” went into that tweet.
How do you arrive at calling Kyle Jenner vacuous? She has an audience and has been quite successful at monetizing. If she is vacuous then Snapchat and lot of other startups should be described the same way. Given the sales of her cosmetic line, a Wall Street investor would do well to listen to her when she thinks a service is over.
I guess market manipulation must be legal, for example remember that guy who shorted Herbalife then tried to manipulate its price downward?
Whatever made that legal must make what you propose legal too: after all she could say "I shorted the stock because I thought it was doomed; I shared my frustration on Twitter out of the same frustration."
That's quite hard to separate from "I shorted the stock because I knew that I could manipulate it into falling by tweeting a negative opinion about it."
It's funny, no one thinks it's a problem to buy a stock and then go tell people good, truthful about the company to try to get the stock to go up. But when you short a stock and then go say bad, truthful things about the company then people want to call it market manipulation.
