"1000% Will Rise Immediately"... YouTube Stock Channels Confusing Investors

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Amid the rapid changes in the stock markets of major countries such as South Korea, the United States, and China due to the COVID-19 pandemic, a large number of young individual investors in their 20s and 30s have entered the market, leading to a significant increase in the sales of finance and investment books. On the 27th, economic books were displayed at Kyobo Bookstore Gwanghwamun Branch in Jongno-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Gong Byung-sun] As more people access stock information through YouTube, content that provides incorrect information or only recommends rapidly rising stocks is confusing investors. Ultimately, there is a growing call for financial knowledge that can distinguish between accurate and false information.

As the number of stock investors increases, stock-related content on YouTube is also gaining popularity. According to the Korea Financial Investment Association, the number of active stock accounts reached approximately 35.5 million at the end of last year. This is an increase of 6.12 million from 29.36 million at the beginning of last year. Consequently, stock content on YouTube has become more popular. Among domestic stock YouTube channels, the one with the most subscribers is ‘Sinsa Imdang,’ currently recording about 1.32 million subscribers. It had 600,000 subscribers in February last year and more than doubled in less than a year. The channel ‘Shuka World,’ with 1.25 million subscribers, also more than doubled from 600,000 in March last year.

However, there are concerns about YouTube channels recommending stocks based on incorrect information, requiring caution. Channel A, on the 5th, treated the cooperation between Hyundai Motor, Kia Motors, and Apple on autonomous vehicle development as a given and introduced related partner companies. Although Hyundai Motor and Kia Motors announced on the 8th that they are not in talks with Apple regarding autonomous vehicle development, the channel interpreted this not as an admission of incorrect recommendations but as the possibility of cooperation still remaining. If someone bought related stocks on the 5th after watching the YouTube video, they could suffer significant losses. The stock price of SL, recommended as a Kia Motors-related stock by the YouTube channel, fell about 9.3% from 28,450 KRW on the 5th closing price to 25,800 KRW on the 8th.

There were also cases of confusion caused by information based on fake news. Channel B predicted that former U.S. President Donald Trump would return to power and forecast a stock market boom in Korea. According to a video posted on the 5th, it said, “On the surface, it seems the Biden administration has taken office, but former President Trump will suppress it,” and “If the Trump administration involves the military in North Korea issues, a stock market boom will come to Korea.”

Advertisements that lure viewers to stock leading chat rooms by promoting rapidly rising stocks are also problematic. Provocative phrases such as “1000% immediate rise,” “Stocks about to explode before Lunar New Year,” and “Please follow the stocks” appeared in YouTube ad thumbnails. These emphasize the possibility of striking it rich to lure people into stock leading chat rooms. Channel C said, “There is no need to envy large-cap stocks,” and “You just need to record the upper limit price three times with the stocks I recommend.” Kim Juhyun (31, pseudonym), an office worker who started investing last year, said, “Whenever a stock channel ad with provocative phrases appears at the top of YouTube, I find myself watching the videos without realizing it,” and added, “Financial knowledge to distinguish these kinds of content is necessary.”

Professor Sung Tae-yoon of Yonsei University’s Department of Economics said, “I do not think it is bad that a lot of information is distributed on YouTube itself,” but pointed out, “Recommending only specific stocks or providing incorrect information is problematic.” He added, “Investors need financial intelligence, such as the ability to select stock-related content.”