29/10/2020

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Finance Reddit Shuts YouTuber’s $100,000 Investing Contest

(Bloomberg) — A Reddit forum that’s emerged as a hub for younger traders removed a...

(Bloomberg) — A Reddit forum that’s emerged as a hub for younger traders removed a post from popular YouTuber ‘MrBeast’ after he sought investment advice and offered a cut of the profits.

Moderators of Reddit’s r/wallstreetbets community removed the post from the YouTube content creator, whose real name is Jimmy Donaldson, after he promised to invest $100,000 in the best trading idea that the forum could send his way.

“Investing money in the stock market is inherently risky and we do not recommend following trades such as this,” said moderators of the subreddit, which has become popularized by newer investors known for their Robinhood accounts and interest in bankrupt companies.

Donaldson, who has 38.7 million subscribers on his YouTube channel, is known for videos that involve carrying out pranks with relatively large sums of money. He recently posted a video in which he set off what he said was the world’s most expensive firework.

“I’m bored, so I’m going to invest $100,000 into whatever you guys decide on Robinhood,” the occasional philanthropist wrote in the post which was removed just hours after it appeared on Wednesday. “I want a super risky investment. Give me something so crazy that I have like a 2% chance of it working but if it does I make millions.”

The YouTuber had said the winning idea would be what redditors ‘up-voted’ to the top position. An idea that climbed to the top of approval rankings before the post was taken down was a September call option on Tesla Inc. for $3,500 — a long shot with the company’s shares currently trading at $1,546. The automaker is a popular stock on Robinhood’s platform, currently ranking 10th on its Top 100 list.

Donaldson may have run into trouble with his promise to give the person behind the winning idea 20% of any eventual profit.

“We are condemning the illegal nature of providing compensation for investment advice to individuals who are not registered under the investment U.S. Investment Advisers Act of 1940,” the moderators said.

Read More: Tech Enables Irresponsible Amateur Day Trading: Fully Charged

(Updates with Robinhood’s ranking in sixth paragraph.)

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