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Are Activist Investors Piling into Social Media Frenzies Playing with Fire?

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First Day Of Trading Of The Lunar New Year at The Hong Kong Stock Exchange (HKEx)

Social media-led activist investors are playing a potentially costly game, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The warning from Nigel Green, the chief executive and founder of deVere Group, comes as the video games retailer published its first earnings report since it grabbed international attention during a Reddit-fuelled buying frenzy in January.

Both the gaming firm’s sales and profit figures were lower than many analysts had anticipated and its shares, which had dropped 6.5% during the day, briefly climbed 8% in after-hours trading before falling more than 15%.

Mr Green says: “This year has seen a surge in day-trading frenzies, triggered by so-called ‘activist investors’ on social media platforms and online forums urging others to invest their cash into populist bandwagons.

“They have tapped typically inexperienced, younger people who might not necessarily have the financial resources to be resilient against usually highly speculative and volatile investments.

“By being unaware of the high level of risk involved in these social media-led activist investment campaigns, people are playing a potentially very costly game.”

He continues: “Extreme caution should be exercised before joining stock frenzies of this nature. The valuations can be expected to be wild – in both directions – and there’s a legitimate risk that novice investors could face a financial hit.

“To create, grow and safeguard wealth consistently to reach your long-term goals – which for most people is financial security and freedom – there’s no substitute for independent, professional, personal advice.”

At the height of the GameStop frenzy, Mr Green said: “Micro-bubble spotting, and diversification across asset class, sector, region and even currency, should become a priority for investors right now.

“As ever, investors should work alongside a good fund manager to seek out those stocks most likely to generate and top-up their wealth over the long-term.”

The deVere CEO concludes: “I would avoid piling into stocks pumped by social media influencers.

“If you do want the thrill or novelty or chasing big gains, you really should ensure that you have a sound, diversified, long-term plan beforehand.

“There’s a major difference between investing and gambling.”

 

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Stock Market

U.K. And Nigerian Stock Exchange to Deepen Partnership For Growth

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Nigerian Stock Exchange

The United Kingdom (UK) and the Nigerian Stock Exchange (NSE) have reiterated their commitment to improved partnership towards the development of the Nigerian capital market and the economy.

Nigeria is the second-largest destination for investments and U.K. businesses in Sub-Saharan Africa.

Deputy British High Commissioner, Lagos, Mr. Ben Llewellyn-Jones was at the NSE, now known as Nigerian Exchange (NGX) Limited, at the weekend, as part of the efforts to deepen the relationship between the U.K. and NGX. Llewellyn-Jones was given the privilege to ring the closing bell for the market.

Llewellyn-Jones said his priority was to continue to create enabling environment for the growth of business relations between U.K. and Nigeria, especially through the Nigerian capital market.

He noted that U.K. and NSE have historically been partners, pointing out that the U.K. has continued to build on the shared history between the U.K. and the Exchange, with the U.K. still very active in the Nigerian market.

“My role is to not only celebrate that but also to grow, encourage and sustain this level of participation. Although it has been a difficult year economically and financially, I am encouraged by the resilience, creativity and positive performance of British businesses and investments here in Nigeria and I am grateful for this opportunity to talk about how much the U.K. will continue to do to support Nigeria and British businesses in Nigeria,” Llewellyn-Jones said.

Chief Executive Officer, Nigerian Exchange (NGX) Limited, Mr Temi Popoola said it was historic that the British Deputy High Commissioner was the first person to beat the closing gong since the unbundling of the NSE and the renaming of its securities trading business as NGX.

According to him, since the birth of the Lagos Stock Exchange, the British High Commission has remained a partner and supporting institution throughout its journey.

“In the spirit of continued partnership, I welcome Mr. Llewellyn-Jones to the NGX as I look forward to deepening the partnerships between both organisations to further drive sustainable economic development for Nigeria and Africa as a whole,” Popoola said.

He noted that partnerships are a critical element of the NGX’s strategy as it will continue to engage stakeholders whose support is essential to the achievement of its aspirations in the post-demutualisation period.

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Nigerian Stock Exchange

VFD Group Plc Receives SEC Clearance for its Proposed N4.13Billion Right Issue

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Nonso Okpala - VFD Group - investorsking.com

Lagos-based proprietary investment company, VFD Grouphas received clearance from the Securities & Exchange Commission (SEC) for the proposed right issue of 7,452,054 Ordinary Shares of 50 Kobo each at N556 per share based on 1 share for every 16 shares held.

The proposed right issue was approved by the Board of Directors at its Extraordinary General Meeting (EGM) which held on 23rd November 2020. The capital raise is part of the long-term strategic plan of VFD Group to harness the opportunities in selected companies that meet VFD Group’s Investment criteria.

The Group Managing Director/CEO, Nonso Okpala, has expressed his gratitude to the regulatory body, SEC, for the clearance, while hinting on the next phase of the business.

“Our expansion drive has been a long time coming and with this clearance, one of our immediate first steps is the enhancement of our systems, and the integration of all our subsidiary offerings under a very effective and technological platform. We are focused on expanding further within the local financial services industry as well as on the African continent,” he disclosed.

VFD Group is a proprietary investment company that focuses on building positive and socially conscious ecosystems by aggregating potentially viable business with the objective of creating innovative products and solutions that are accessible to the everyday Nigerian citizen and entrepreneur.

VFD Group Plc was founded on the values of integrity and good governance, and built on the strength of innovation and network, the goal of VFD Group is to establish a firm foothold in various ecosystems on the continent through their subsidiary companies. VFD Group operates through various portfolio to provide innovative financial services – alternative funding and investment channels – that are accessible to individuals and small businesses that provide the following services: Financial Advisory, Currency Exchange, Debt services, Private Funds Management, Asset Management, Real Estate, International Remittance/ Settlement.

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Nigerian Stock Exchange

Listed Companies Gained 0.16 Percent on Friday

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Nigerian Stock Exchange

Companies listed on the Nigerian Stock Exchange (NSE) gained 0.16 percent on Friday to push the All-Share Index from 38,571.89 basis points on Thursday to 38,808.01 index points on Friday.

The Exchange market capitalisation rose to N20.310 trillion with investors trading 262.510 million shares valued at N2.438 billion in 3,525 deals.

Fidelity Bank led the most traded stocks in terms of volume with 46,151,809.00 shares valued at N110,562,441.03.

This was followed by First Bank of Nigeria Holdings’ 33,985,247.00 shares worth N258,398,231.05. See the details below.

Top Trades

Symbols Volume Value
FIDELITYBK 46,151,809.00 N110,562,441.03
FBNH 33,985,247.00 N258,398,231.05
GUARANTY 33,465,217.00 N965,283,002.55
MBENEFIT 20,451,489.00 N7,049,340.54
MANSARD 14,092,168.00 N12,247,827.76

Top Losers

Symbols Last Close Current Change %Change
JAPAULGOLD N0.70 N0.63 -0.07 -10.00%
STERLNBANK N1.64 N1.48 -0.16 -9.76%
FCMB N2.92 N2.66 -0.26 -8.90%
MBENEFIT N0.37 N0.34 -0.03 -8.11%
GLAXOSMITH N6.80 N6.40 -0.40 -5.88%

Top Gainers

Symbols Volume Value
FIDELITYBK 46,151,809.00 N110,562,441.03
FBNH 33,985,247.00 N258,398,231.05
GUARANTY 33,465,217.00 N965,283,002.55
MBENEFIT 20,451,489.00 N7,049,340.54
MANSARD 14,092,168.00 N12,247,827.76

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