Evgeny Kireev

The holidays are a time for giving, and while many still opt for traditional gifts such as toys, gadgets, and clothing, the current digital era calls for something that offers long-term value: stock. No more wrecking your brain for that multi-store gift card or that last-minute surprise; the internet has figured it out for you. 

Although non-traditional, this gift is an investment for the future  and benefit your loved ones for years to come. 

Why give stocks as a holiday gift?

One of the main and obvious reasons stocks make an excellent holiday gift is the potential for long-term growth. Unlike a new pair of shoes or the latest smartphone, stocks have the potential to increase in value. While no investment is without risk, a well-chosen stock can outperform traditional gifts in the long run. If you gift stocks from strong, stable companies or index funds, there’s a good chance they’ll provide financial benefits for years.

Many families use stock investments as a way to leave a legacy for their children or grandchildren. If a stock is chosen carefully and held long-term, it can grow significantly over the course of several decades. This makes it an ideal gift for younger family members and potentially give them a strong financial foundation for their future.

Giving stocks as a gift can spark an interest in investing and financial literacy. Many people, especially younger generations, feel it is a burden to learn about stocks and are scared of the risks. However, by gifting stocks, you introduce the world of personal finance, which could encourage them to build a wealth plan for their financial future. It can be a valuable opportunity to teach about diversification, compounding returns, and the stock market. 

Stocks may seem lazy and effortless, but like all gifts, stocks can be personalized for your loved ones. Values, interests, and goals are not only aspirations but can also be turned into investments for future purposes. It is a thoughtful gift that has meaning beyond just its financial value.

How to gift stocks 

If you’re new to stock gifting, selecting the right type of stock or fund is crucial. A solid choice for a gift would be shares of well-established companies that have a history of steady growth and performance, such as large blue-chip companies or index funds that track the overall market. This also minimises the risk and can be adjusted accordingly. If you’re not sure where to start, exchange-traded funds (ETFs) or mutual funds that offer diversification might be a good option.

To give stocks, you will need a brokerage account. Many brokerage platforms, such as Robinhood, E*TRADE, or Fidelity, allow users to gift stocks directly. Some platforms also offer the option to create custodial accounts for minors, which is useful if you're gifting stocks to an ambitious teen. A custodial account ensures that the recipient can access the stocks once they reach the age of majority. The process of setting up an account is usually straightforward, and many brokerages allow you to transfer stocks as gifts through a simple online form.

If you prefer less involvement, some companies offer stock gift cards or certificates that allow the receiver to choose which stocks they want to purchase. Companies like Stockpile provide the option of giving fractional shares of stock, which allows you to gift a smaller portion of a stock if the price per share is high. This makes it easier for you to give stocks even if you’re working with a smaller budget.

Lastly, as stocks are quite an unusual gift, write a note or give an explanation about what you’re giving them, how the stock works, and why you chose it. You could include some resources or recommendations on how they can track and manage their new investment (only if needed, of course).

Drawbacks to consider

While stocks have the potential for growth, they also carry risk. The value of the stock could go down, and there is always the possibility of losing money. For individuals who are not familiar with investing, the ups and downs of the stock market can be confusing or even disheartening.

In addition, giving stocks requires some understanding of the market, the specific companies you're investing in, and the person you’re giving them to. If you're not careful, you could be gifting someone an unwanted commitment. 

Stocks include tax complications. If you are new to the stock market, make sure to research tax rules or consult a financial advisor before gifting stocks, particularly if you're gifting a significant amount.

Have a happy holiday 

Giving stocks as a holiday gift can be a thoughtful, unique, and meaningful way to express care and to help others build long-term wealth. It’s a gift that transcends the typical material items and offers an opportunity for growth and financial education. Whether you choose individual stocks, ETFs, or mutual funds, your gift could have lasting value. By taking the time to research, understand, and select the right stocks, you can make a meaningful contribution to the future financial success of your loved ones. 

And remember, stocks aren’t for everyone. To save a lot of headaches, think about the person receiving the gift, their interests, personal life, and their financial literacy. 

Viral investing is the practice of investing in meme stocks popularized by social media platforms, and it’s caused multiple earthquakes on Wall Street in these post-Covid years. By sharing information and strategies quickly and easily on platforms such as Reddit and X, investors can create rapid traction and a surge in interest in a particular stock. The effect on that stock price can be nothing short of meteoric – the 2021 GameStop short squeeze is a prime example. This is a phenomenon based on trend rather than fundamental analysis, and it carries all the risks inherent to that kind of scenario.

Cult stocks, on the other hand, have been around for a while. They are also backed by investors’ faith and belief instead of by the financial fundamentals that we use to establish the stability and health of an asset, but the investors tend to be passionate early adopters of niche products or services. They might be nothing more than smoke and mirrors led by a charismatic founder convinced of a future market where there is none, but occasionally they do turn out to be diamonds in the rough with excellent returns for the farsighted investor who sticks around for the long run - think Apple. 

Social media-fueled phenomena

Meme stocks and viral investing are recent phenomena fueled by social media. Online communities of investors united by a common interest in a particular stock contaminate the wider investment community, creating that surge of interest that sends a company’s shares skyrocketing overnight as a meme stock. The volatility of the situation creates significant risk - the ascent to the moon becomes a painful crash landing if that interest wanes, leaving investors with significant losses. Don’t fall for pure virality unless you’re looking for a very short-term, immediate-gratification-type of investment and you are able to get out quickly.

At particularly high risk, when it comes to meme stocks, are novice investors who lack knowledge and experience, and this, unfortunately, is precisely the type of investor who is most likely to follow social media sentiment and strategy advice without putting in the legwork of due diligence.

Meme stocks do provide the chance for very high returns, and very quickly, so I wouldn’t write them off completely just because of the risk element. After all, volatility is an inherent feature of investing – an investor accepts a mitigated risk, in return for the future reward of long-term returns on capital. But there is a big difference between investing and gambling, and that line is perhaps more easily blurred with meme stock than any other type of asset.

Fear of missing out on an apparently lucrative investment opportunity can result in impulsive and irrational decisions based on information received without verifying the source or doing the necessary due diligence. FOMO is a widely recognized phenomenon in both the crypto and meme stock worlds, where social media is a powerful influence on investor behavior and markets move spectacularly fast.

Social media influence

The lack of financial education in schools has driven Millennials and Gen Z to use social media for their financial information. Not so surprising for those generations who have grown up online. “Finfluencers” on social media are now racking up millions of views for their stock-picking videos, regardless of the accuracy of the information or the qualifications and motivation of the content creator.

Social media’s influence on young investors is not to be underestimated - 76% of Millennial investors and 73% of Gen Z recently told Nasdaq surveyors that they were likely to use social media as a resource when making investment decisions. At the end of the day, the returns from Finfluencer stock picks aren’t necessarily any better than a good ETF, and they come with the added danger of the low-barrier online environment where the advice could be questionable.

Insider information vs misinformation

It’s a double-edged sword. Social media and internet communities can provide solid ‘insider’ information before the general public gets wind of it, but it’s also an unregulated environment where unverified and possibly inaccurate information can spiral out of control. 

How to spot the difference? If your due diligence on a meme stock reveals solid fundamentals that would make it a good long-term investment in any case, if the economic climate is right and it fits into a well-diversified portfolio, then it could make sense to climb on board. Obviously, it’s even better if you can buy into a potential meme stock just as it’s taking off, but if you’ve spotted something that’s already on its way into orbit it can still be worth investing in, as long as it ticks all the boxes on the due diligence and still has some climbing potential.

Tips of going viral

As an investor, you may one day find yourself in the fortunate position of holding stocks that go viral. I can speak from personal experience here – the Wonderskin all-day lip stain that exploded on TikTok last year is now so popular that one is sold every 15 seconds, and that award-winning cosmetics brand was already in my portfolio. Feels good, but don’t just sit back and enjoy the ride. It’s time for action.

Do the research – companies and products go viral for different reasons, so why did this one take off right now? Reassess the market to establish if this is the beginning of a new trend or a flash in the pan. Is this virality sustainable as the basis of long-term success for the company? In which case you might consider buying more of the same stocks, depending on the business model and market saturation.

Research the competition because this could be a good time to start buying into them as well, but before you invest in something similar, make sure the market is sustainable. And always diversify – the old adage never fails, so don’t put all your eggs in one viral basket.

The space industry is one of the fastest growing industries in the world economy, and Space Tech is the exciting niche providing a constant flow of new technologies to feed it. You don’t get any more cutting-edge than Space Tech, so for investors who are passionate about innovation, it seems to tick all the boxes.

However, any potential investment needs to be assessed while considering the innate complexity and pioneering nature of the niche. Is Space Tech really “the final frontier” of tech investment, and what do you need to consider before climbing aboard the spaceship?

Sputnik to SpaceX

The Soviet Union’s 1957 launch of Sputnik 1, the first artificial Earth satellite, sparked widespread interest in space exploration and triggered the Space Race. Since 1969, when 600 million people across the globe watched Neil Armstrong’s milestone moonwalk, space technology has developed in leaps and bounds.

In more recent years, with SpaceX and the first commercial missions to the International Space Station, a universe of new possibilities has opened up for space industry investors. Data from Space Capital reveals that in the first quarter of 2024 alone, investment in the space economy grew 33% quarter-over-quarter to $6.5 billion across 103 companies.

It’s interesting to note that VC investors were responsible for around half the capital deployed, signalling strong investor confidence, but is it well-placed? 

Space Tech Benefits on Earth

We already rely heavily on space technology on a daily basis - satellite systems for our voice and data communications, and GPS navigation for precise location information. Observation satellites monitor natural resources, air quality and environmental change, and track and predict natural phenomena.

Our reliance on weather-dependent activities like aviation is increasing, so weather forecasting is becoming increasingly important, as is air traffic management. In the agriculture industry, prediction of natural phenomena optimises production and protects profits. Space mission technologies developed for cultivating and preserving food and purifying water have already been deployed for the benefit of millions of people on earth.

Space Tech is already deeply rooted into our daily lives, with immense potential for further development. This combination makes it a promising candidate for investment. 

Major Players to Watch

Space Tech presents an investor with a dazzling array of tech domains and companies. Among the top performers, Lockheed Martin is the historic player with a 100-year track record spanning from aircraft to satellites and space technologies. MDA is a Canadian developer specialising in satellite systems, robotics and geo-intelligence. The relatively young Rocket Lab, founded in 2006, manufactures spacecraft and satellite components, and provides launch services and in-orbit management.

 All this space activity requires highly specialised support services. Among the pioneers, Orbit Fab is a US startup that aims to introduce the first orbital fuel delivery service of hydrazine, a chemical used by many satellites, while Astroscale focuses on life extension for satellites already in orbit, end-of-life solutions for defunct satellites and the essential clean-up of space debris. AstroForge is a US company pioneering the uncharted territory of asteroid mining – a field that will be vital for life beyond Earth not to mention extremely profitable for those involved.

 The Space Industry’s Challenges and Impact

The space industry is challenges are absolutely unique, and those who develop the solutions will be game-changers and history-makers. Industry growth to date has been hampered by exorbitant costs, so it’s essential to develop more reliable and affordable ways to get cargo into low Earth orbit (LEO).

There is an increasing amount of potentially dangerous debris floating in space that needs to be managed. Few countries have ever actually sent people into orbit, so it will be a major challenge to develop the required infrastructure and training for safe and sustainable human habitation in space.

Space Tech has a significant impact on the technology sector as a whole – particularly on communications and defence, because it is often the point of origin for solutions that are subsequently used outside the space industry itself. This cross-applicability of certain space technologies implies even better potential for returns on well-researched investments.

 Market Potential for Space Tech 

The potential of Space Tech is vast and, because of the absolute novelty of the sector, can be tricky to quantify. It is growing rapidly, driven by multiple factors including the increasing demand for satellite-based services, the untapped potential of asteroid mining and the development of space tourism. According to a Morgan Stanley report, Space Tech’s market potential should reach $1 trillion by 2040. 

This presents a huge opportunity for all tech companies that can offer space-based services for civilian and commercial purposes, while the military sector is also expected to grow rapidly due to increasing global security concerns.

Space Tech Opportunities for Investors 

As a priority, the space industry needs to become more affordable, so investors would be well-advised to investigate cost-reducing technologies like reusable spacecraft and versatile small satellites (smallsats) which will be increasingly adopted for IoT and 5G networks.

The smallsats market alone is expected to reach $260 billion by 2029. Other key trends on the rise include robotic automation technology, which enables unmanned vehicles to explore the solar system and is already extensively deployed by the major space agencies, and AI which is being increasingly integrated into space-related activities such as mission design, navigation and data analysis.

The Future in Space

The US’s rapid commercialisation of space has transformed the landscape, and although other regions and countries are following suit, they are still in their relative infancy. It is unlikely that China will become an international space tech provider in the West, having become the US’s competitor in the modern space race, and both superpowers are heading for the moon.

Increased industry focus on lunar technology will further shape the Space Tech sector over the next decade, catalysing the development of even more advanced technologies for deep space transportation, lunar resource utilization and colonization which, in turn, means even more future opportunities for investors. 

Space exploration and investment have shared characteristics. Both require in-depth research, meticulous analysis, long-term vision and strategy to reach clear goals. By their nature they both entail risk, but also the potential for immense rewards. Will you join the space race?

Created to become the future "front page of the Internet," Reddit was launched in 2005 by roommates, Steve Huffman and Alexis Ohanian. The site officially launched in June of 2005. The initial idea sought for users to submit content and have their communities vote on what was submitted. The more upvotes a submission received, the closer it reached the front page of the main site, regardless of which community it was posted in. 

With the ability to remain anonymous and share potentially newsworthy content instantly, Reddit has also been at the center of multiple controversies. From incorrectly identifying the Boston Marathon Bomber to sharing leaked celebrity photographs, the site has not been without some negative attention. Despite negative press, the ever-growing social media community continues to remain a fixture for millions of people around the world.

Reddit goes public

Following Pinterest, Reddit has been the most recent social media platform to be publicly traded. It's also the first social media company to make such a move in half a decade.

Reddit debuted on the New York Stock Exchange in March under the ticker RDDT. The original plan was to raise nearly $750 million in the IPO - a plan which was in the works for years.

Reddit's strategy to ensure a successful IPO has been multi-faceted and four-pronged:

1. Community-building focus
2. Competitive advantage
3. Strong PR campaigns
4. Strong infusion of capital

This isn't a multi-stage plan. Reddit's strategy revolves around accomplishing these goals simultaneously. 

Reddit's IPO offers a unique gamechanger

Reddit is not the first social media platform to go public, though they are the first to freeze a portion of shares for 75,000 of their top-rated or most engaging users. Those site members were offered the shares at the IPO-reserved price originally set for investors. The Reddit team also plans to follow up on this with a tiered share allocation system. 

The idea behind these moves was to instill a sense of ownership for the users of the site. This new territory of allocating digital space and attributing ownership of it is quickly becoming a popular topic of discussion and analysis. The original launch plan saw 22 million shares go public between $31-$34 USD. Reddit's take on user ownership could potentially shift the way brands interact with their fanbase and customers. As shareholders, communities can now be rewarded with potential voting power on the site and on the direction it takes.

Hesitancy about Reddit's IPO

Despite achieving its goal of being on the front page of the internet and boasting large daily numbers, Reddit has never turned a profit. The shift from being a private to a public company now brings added pressure on the site to begin turning profits. If the investors aren't happy, the share price could quickly drop.

There is potential for the site to  turn to a more advertising-based revenue strategy, however some are concerned that this could negatively affect users’ experience and Reddit's communities could take their activity to other, less crowded platforms. Reddit also lacks the same market saturation as both Google and META. Even though the majority of Reddit's revenue comes from advertising among its myriad of communities, the capital structure isn't sufficient enough to give ample voting power to the IPO's initial investors. The difference between the voting power in Class A and Class B shares (10x the power of Class A shares) affects their worth.

Given that social platforms are ever-changing, Reddit is exploring innovative new ways to generate revenue. Data licensing for the AI industry has been one avenue they've been exploring. Reddit's foray into AI data licensing will also build a bridge with Google, who can pay Reddit for access to the platform's posts and utilise them as training material for new AI models.

Even if it proves to be a positive financial gain for the site, there are multiple communities against Reddit's adjustment towards further monetization. Despite some users against Reddit's new public face, the IPO has launched at a time when social networks are evolving into investable platforms.

What's the best action to take?

Social media is a staple in our lives and it's hard to imagine it going away anytime soon. Reddit's IPO is a perfect example of the current landscape as social media platforms continue to grow into even more significant businesses. Reddit’s unique content and voting structure, which has given the company enough of a USP to attract vast user numbers and thus a lot of potential for monetization - an important aspect for prospective investors. My advice? If you’re thinking about adding Reddit to your portfolio, perhaps give the company a quarter before investing. It's best to watch and see if this move can exceed everyone's expectations before making any big decisions.