Social Media as an Asset Management Strategy

9 Pages Posted: 24 Mar 2017 Last revised: 30 Apr 2017

See all articles by Piotr Wiśniewski

Piotr Wiśniewski

Warsaw School of Economics - Corporate Finance Unit, Institute of Finance, College of Management and Finance

Dan Ophir

Ariel University

Date Written: March 21, 2017

Abstract

Among diverse social media uses covered by researchers one has thus far captured surprisingly scant attention: social media as an investment class per se. Despite the fluctuating fortunes of numerous social media initial public offerings (IPOs) and their aftermarket trading, social media stocks are morphing into an increasingly compelling investment opportunity – mirroring the improving business models of their companies. The proposed research endeavors to review the risk-adjusted performance of all major asset management initiatives focused on social media investments and available globally. In assessing the efficiency of investment managers targeting social media equities, (Post) Modern Portfolio Theory metrics have been used wherever publicly available data on returns and risks have been accessible. The research catalogues global examples of active (implicating the use of human talent) and passive (replicating predefined benchmarks) approaches to the management of social media as an investment asset. It discusses the benefits and limitations of incorporating social media stocks into the portfolios of various pooled investment vehicles (e.g. mutual-, hedge-, and private equity funds). Ultimately, the research ponders the future of social media as a viable and value-adding investment asset in view of the industry’s brisk expansion and improving monetization. The research draws on the trading datasets of all social media portfolios for which a modicum of transparency has been available. The conclusions recapitulate trends likely to affect the social media industry in the years to come.

Keywords: Social media, asset management, investment management, portfolio efficiency, modern portfolio metrics

JEL Classification: D85, G11, G14, G15, G15, G24, L82

Suggested Citation

Wiśniewski, Piotr and Ophir, Dan, Social Media as an Asset Management Strategy (March 21, 2017). Available at SSRN: https://ssrn.com/abstract=2939267 or http://dx.doi.org/10.2139/ssrn.2939267

Piotr Wiśniewski (Contact Author)

Warsaw School of Economics - Corporate Finance Unit, Institute of Finance, College of Management and Finance ( email )

Madalinskiego 6/8
PL-Warsaw, 02-513
Poland

Dan Ophir

Ariel University ( email )

Israel

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