I am sure that by the title of this article you are either a) interested in the definition of StockTok or b) you are an avid TikTok user who already knows the ins and outs of StockTok. For those of you who are here for the definition: StockTok (Stock TikTok) or FinTok (Financial TikTok) are segments of the social media phenomenon TikTok. It involves ordinary people or even verified experts creating short video content on everything and anything related to finance.
TikTok - Supercharged by the pandemic
TikTok has absolutely thrived due to the pandemic. As of December 2020, worldwide app downloads of the platform reached a total of 2.5 billion downloads[1]. In the UK - just before the first nationwide lockdown of 2020, the app was downloaded 278,000 times; this surged by 34% when lockdown was enforced just a week later[2].
Interestingly, when we look at the impact of the pandemic and investing, data suggests that investors between 18 and 30 have capitalised from the turmoil[3]. As people have been spending much more time at home and far less money, the younger generation have turned their attention to their futures. TikTok has given them the opportunity to learn in ways we would never have thought of.
A deep dive into StockTok.
Hashtags are just one of the ways that users can view videos related to a certain category and, at the time of writing*, #Stocks was one of the most popular hashtags on the app - with a staggering #2.5 billion views. Some other highly viewed hashtags include:
#Investing - 1.9bn, #Finance - 1.9bn, #StockMarket - 1.6bn, #StockTok - 775.1m, #Crypto - 731.1m and #FinTok - 22.1m.
A great example of finance TikTok in action is the GameStop frenzy. As sales in the stock surged, viral user-generated content popped up on TikTok explaining the surge using graphs, analogies and personal stories[4]. It went so viral that #Gamestop now has 749.9 million views*. So, it really is possible to see how one platform is having such an impact on the younger generation when it comes to finance.
What does this mean for regulation?
Generally, TikTok is putting a spin on personal finance and in some cases, it is teaching young adolescents the things that school never taught them. They now have access to easily digestible explanations for questions such as: What is a mortgage? What is an ISA? What is a stock? What is cryptocurrency?
Now, do not get me wrong, there are a number of pros with this, but with these positives come very many negatives. One of the most alarming is the amount of 'financial advice' the app shares. In some cases, content creators do include caveats in their videos that the information they provide 'is not financial advice' - but is that really enough? Should there be more regulation when it comes to these types of videos, especially as they are aimed at the retail investor?
The question on everyone's mind is: is the trend here to stay? Or is this another app that will run its course? I guess we will await the future to find out but, one thing I will say is that times are changing. The connection between technology and Generation Z is powerful. Perhaps this connection will inherently impact the confidence and knowledge of the investment world for the next generation of investors.
References
[1] https://wallaroomedia.com/blog/social-media/tiktok-statistics/
[2] https://www.theguardian.com/technology/2020/apr/26/how-coronavirus-helped-tiktok-find-its-voice
[3] https://www.investorschronicle.co.uk/education/2020/05/12/how-can-young-investors-navigate-coronavirus/
[4] https://www.businessinsider.com/teens-swarm-tiktok-learn-about-gamestop-amc-investing-stock-market-2021-1?r=US&IR=T
* The data provided here is at time of writing - figures have been taken directly from the TikTok app.