We’ve really entered a new wave of investing recently.
The recent rise of social media-inspired retail investors has been incredible. This retail investor surge has spurred interest from a range of companies targeting this growing market. Of note, Square (NYSE:SQ) has made inroads in making its Cash App go viral. In fact, #CashAppStocks is trending on Twitter today, as the company has announced a $50,000 giveaway in stocks to new investors.
Here are a few things investors need to know about this giveaway.
The #CashAppStocks Marketing Strategy Is Game-Changing
Square has done quite the job of reducing its customer acquisition cost dramatically via these cash giveaway campaigns. More and more millennial investors have become interested in the investing game of late. Accordingly, these social media campaigns have the potential to drive long-term growth, with a relatively minuscule investment.
Cathie Wood’s Ark Invest has been bullish on aspects of Square including Cash App and the peer-to-peer payments this platform provides for some time. Ark attributes an evolving payment applications market to a long-term reduction in consumer finance and investing products over time. Innovation in this space could lead to an opportunity as big as $800 billion in the U.S. equity market, according to Wood’s recent white paper on this topic.
Square’s Cash App has been utilizing its “Cash App Fridays” campaign since 2017. This marketing campaign has evolved into massive giveaways during select times, driving impressive volumes to this payment platform from new investors, a group which has become highly influential and sought-after in recent years.
Stimulus Bullish for Square and Its Marketing Strategy
Given the massive amount of stimulus expected to hit the market shortly, the #CashAppsStocks marketing strategy looks like it couldn’t be more well-timed.
Indeed, it’s possible we could see an influx of new investors looking for a place to put those stimulus checks to work in the near term. Companies like Square are doing a fantastic job of driving interest in their platforms with these marketing campaigns.
Whether or not Square can be successful in retaining these investors remains to be seen. However, as we’ve seen with the recent Robinhood surge, expectations are that retail investment in equities could continue to climb. In fact, Goldman Sachs is bullish on this idea. The company’s U.S. equity strategist recently revised estimates for how much households are expected to drive equity demand. The verdict? Household demand is expected to be the primary source of capital inflows into equities this years at $350 billion. The second largest source? Corporations, at around $300 billion this year.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.