A way to navigate turbulent financial markets? Follow Will Smith and his crowd of fractional investors.
The Public Social Investment app, which supporters include Hollywood actor as well as NFL defensive end JJ Watt, says it has seen a 70% increase in interaction between its members when they turn to the startup to guide them through the worst stock market crash since the financial crisis.
Speaking with MarketWatch from his apartment in New York, Jannick Malling, co-CEO of Public, said that members have opened the app three times more frequently since the escalation of the coronavirus crisis in the United States ago two weeks.
“When the market fell, we saw first-time investors looking to see what more experienced investors were doing, instead of just following human intuition and immediately starting to sell panic,” said Malling.
The public allows anyone to buy a slice of a stock from a publicly traded American company for as little as $ 5, with no commission. Members can follow a social feed allowing them to exchange ideas with friends and see which securities of more experienced investors are putting money into it, which, according to Malling, is part of the public mission to strengthen “financial literacy for the next generation. “
“Some people are intimidated by investing in the stock market and may not have the money to buy high-value stocks like Amazon
which closed Wednesday at $ 1,907.70 per share, or Google Parent Alphabet
whose Class A shares ended the day at $ 1,102.10.
“The public is opening up this process to more people by letting them invest alongside a community,” said Malling. “It’s a bit like a cross between a social network and a stockbroker.” Typical users are in their early 20s, but Malling said the social investment app has attracted a diverse community.
In March, the app registered a 50% increase in the number of new members. “At times like this, when the market goes down, some people may want to invest more,” added Malling.
Current market volatility
saw a large movement of members of the public in ETFs. They also consult the “themes section” of the application, which, much like a Spotify
playlist, allows them to familiarize themselves with new sectors and industries. “Fighting disease”, for example, includes companies involved in efforts to cure cancer and other diseases, while the theme “the future is female” includes a collection of all companies listed on the S&P 500 led by female CEOs.
The social investment application derives its income from securities lending to short sellers, as well as interest on account cash balances.
In January, Public raised $ 15 million in a Series B financing round, led by venture capital funds Accel and Greycroft. YouTube creator and entrepreneur YouTube, Casey Neistat, Girlboss founder Sophia Amoruso, and Japanese soccer star Keisuke Honda were among those who participated in the funding round.
Malling said the audience plans to use the money to grow their community and will add new features that allow members to find more ways to connect.