Trading Tips

What Celebrity Investors Do—and Don’t—Mean for a Company

November 26, 2019 Trading Tips
Trading Tips
What Celebrity Investors Do—and Don’t—Mean for a Company
Show Notes

Typically, celebrities and investing seem like two entirely different subjects. That hasn’t always been true. There’s actually been a rich history of celebrities getting involved with publicly-traded companies as investors, active partners, and even board members.

To use one historic example, actress Grace Kelly once served on the board of 20th Century Fox. 

Today, a myriad of celebrities can be seen as getting involved with a company. That may include a celebrity investment, like that of Leonardo DiCaprio and Orlando Bloom in digital bank Aspiration Bank.

Or it could include a far more active investment and board seat like Oprah with Weight Watchers or Shaquille O’Neal with Papa John’s Pizza. 

The fact of the matter is, there’s a blend between celebrities and companies, and there always will be. Celebrities are high-earners, and astute ones will make investments elsewhere. That’s why both Shaq and Michael Jordan have made far more money from their investments than from playing baseball. 

Knowing how to balance time and money can be a key factor in a company’s success. 

That said, there are a few differences. Like any enterprise, a business is a risky endeavor with no guarantee of success. Even with a celebrity bringing their skills to the table, a company could still falter. Weight Watchers had a difficult time with Oprah due to her demanding schedule. 

And a passive investment by a celebrity in a firm doesn’t give investors much of an indicator of success at all—Aspiration Bank is struggling and in need of more capital right now.

Those caveats aside, when celebrities take a big stake in a company, and commit to being a part of it, there’s a good reason to expect some big success ahead. That’s why it’s interesting to see Shaq’s involvement with Papa John’s, and more recently Drake’s involvement with pot stock Canopy Growth. 

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