Stocktwits paid stock ads

Paid Stock Ads in Stocktwits Daily Rip Newsletter (2021 Performance Analysis)

Disclaimer: Lean Investments is a financial education and entertainment website. None of the content below should be misconstrued as investment advice or a recommendation. The author holds none of the positions mentioned below.

Below we analyze the 2021 performance of 40 companies that advertised to specifically promote their stock as an investment in the Stocktwits “Daily Rip” email newsletter in 2021, which reaches 1.2 million subscribers according to its editor on LinkedIn.

Stocktwits’ “Daily Rip” email newsletter is a concise summary of the days market making headlines written in a humorous and enjoyable style that seems catered to the new generation of younger retail investors interested both in individual stocks and cryptocurrencies. It’s a great way to keep up on daily market moves and headlines. The weekend edition also tracks the best performing stocks in each of the major stock market indexes.

Ads in the the “Daily Rip” are clearly noted as sponsored content, typically at the very top of the newsletter and then again in the sponsored segment where the full ad appears, which usually appears as the third or fourth item below the main news items in the newsletter. Paid ads range from major brands such as Draftkings and CME Group, cryptocurrency funds and service providers such as Grayscale and Osprey, as well as some consumer-oriented brands such as Manscape.

Additionally, 40 companies paid to specifically advertise their stock in a promotional manner to Stocktwits’ email subscribers. This latter group is the focus of the below table.

Stocktwits’ Paid Stock Promotions: Performance Analysis

The table below notes when the stock’s ad first appeared in 2021 (many companies advertised in multiple daily newsletters in a row and some throughout the year), the performance at close of December 31, 2021, along with the change in share value from the date of the ad to the end of the year.

The average performance of stocks that advertised in Stocktwits’ Daily Rip was -41% through the end of 2021.

Additional Commentary and Analysis

Below are some additional observations and analysis on this group of promoted stocks:

  • Of the 40 stocks we measured from when their ad first appeared in the newsletter through to December 31, 2021, four generated positive performance, 35 had negative performance and one was unchanged.
  • The average investment performance of the group from the time their respective first ads appeared in the newsletter until the end of 2021 was a loss of 41%. (By way of comparison, the Russell 2000 small-cap index ETF returned a positive 14.54% and the S&P 500 ETF returned a positive 28.75% in 2021.)
  • Of the 40 stocks that advertised in the newsletter, half finished the year trading under $1.00 per share, and 20% finished under $0.10 per share.
  • The best performing stock that advertised itself as an investment in the newsletter was Transphorm Inc. (TGAN), which gained 46% from the time its ad ran in August through the end of the year.
  • The worst performing stock that paid to advertise itself as an investment was Hempfusion Wellness (CBDHF) which lost 94% of its share price value from the time it ran its ad in the “Daily Rip” on February 12th through the end of 2021.
  • Additional significant losses included Scopus Biopharma (SCPS), which was down 89% from its Jan 19th promotion through year-end and Logiq (LGIQ) down 81% from its January 8th advertisement through the end of 2021.

Examples of Stock Ads in Stocktwits Daily Rip Newsletter

Below are just a few examples of the stock advertisements that ran in The Daily Rip in 2021.

Hempfusion stock ad in The Daily Rip Newsletter 2/12/21.
Fearless Films stock ad in The Daily Rip 5/4/21.
Amesite stock ad in The Daily Rip 1/28/21