Social Media influencers on stocks

Tik Tok is not just for entertainment. Social Media influencers can be a a marketing jackpot for companies that are willing to pay to have their product in front of the influencer’s millions of followers. Here is an example of when a company’s marketing strategy included a Tik Tok influencer which in turn made their stock price skyrocket. Invisalign is a form of braces that use clear tray aligners. The company that makes Invisalign, Align Technology, started a marketing campaign targeting teens and moms. Part of this campaign included paying Tik Tok superstar, Charli D’Amelio, to endorse their product to her millions of followers. This plan paid off big time.

Align Technology, stock symbol ALGN, said in its third quarter earnings report that sales of its Clear Aligner cases for teenagers rose nearly 26% from a year ago. That helped lift overall revenue and earnings, which topped Wall Street’s forecasts. Align shares surged nearly 35% on the news the day those earnings came out. As of October, the stock is now up more than 60% this year.

When one of your favorite Tik Tok stars starts talking up or wearing a product, they may be getting paid to make you, as a targeted consumer, want to buy that product. If enough people buy that product, then the sale of that product goes up. This may lead to the company making more money, which is called earnings, and when earnings on a company goes up, more investors want to buy the company’s stock. When more of the company’s stock is purchased, the stock price goes up. This is good for the company, but also for investors that own that stock.

Social Media Influencers are becoming more important in the marketing strategies of companies that target teens and young adults. If you see your favorite Influencer promoting a product, you might want to follow the effect that promotion has on the company’s stock price to help show you how “demand” can be good for a stock.

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