Retail trading: Finance meme accounts are ‘driving the investor,’ Equity Animal CEO says

Equity Animal CEO Mark Moran joins Yahoo Finance Live to discuss finance Twitter and investing-related meme accounts, increasing transparency between retail traders and corporate management, and disrupting investor relations.

Video transcript

BRIAN CHEUNG: Welcome back to Yahoo Finance Live. Meme madness still very much in session. You can see GameStop, AMC, Bed, Bath & Beyond all ripping higher on this Friday morning. Check out Bed, Bath & Beyond up 8%. Why? We never really know. And then AMC up about 2 and 1/2% after Adam Aron tweeted a meme this morning about those Ape shares that they're putting on the public market after that much awaited announcement earlier in the week. But we'll keep that there for right now, continue to keep you tabs on what's going on in the meme market.

But if you are plugged into the Fintwit world, you will have no doubt seen the litquidity account, or lit, known for its premium meme content, banker gossip, and merch. And Mark Moran, one of the minds behind that account, now going off to start his own thing in the form of Equity Animal, which hopes to bring some flair to investor relations and corporate marketing. Mark's here on set, along with Yahoo Finance's Alexandra Semenova, for this conversation. Mark, great to have you on the set.

MARK MORAN: Thank you so much for having me, Brian and Alexandra.

BRIAN CHEUNG: And I want to ask you just kind of about exactly what you're doing here with Equity Animal. You have experience in the meme world and kind of bringing finance to a more accessible crowd. What are you hoping to do with this new venture?

MARK MORAN: So what we're hoping to do here is to really disrupt investor relations entirely. It's a very staid industry that there's been no innovation in for the past 25, 30 years. Companies have been targeting institutional investors, really, just through traditional press releases, maybe some conferences here and there, but nothing major. What we've been able to do is, so while I was at Litquidity, we fell into working with RCI Hospitality Holdings. The stock ticker is RICK.

We've essentially turned them into a company that has a cult-like following on the internet. They have a very charismatic CEO. They've been overlooked by equity research for a long time and, oftentimes, misunderstood by the market. So in the three months that we've been working with them, we've almost 2 and 1/2 timed their average daily trading volume. Social mentions have gone through the roof and have really been able to show the value of this company to retail, bring in a bunch of new people, and generate awareness. So we're looking to do a traditional IRR approach, but also blend in retail, targeting, and awareness.

ALEXANDRA SEMENOVA: Speaking of retail investors, one thing that we've been talking about a lot this week is earnings calls and what companies can be doing differently to make them more accessible to retail shareholders. I know you took RICK's earnings call to Twitter Spaces. How did that go? And what should companies be doing differently in this process?

MARK MORAN: Yeah, great question. So we did do the first ever earnings call on Twitter Spaces. And so normally for an RCI earnings call, they would get 60 to 80 people. Usually, equity research analysts, no one would be able to ask questions who wasn't one or a top shareholder. We had over 5,000 people listen in live or to the recording to the third quarter earnings call that we did last Tuesday.

And we also did a bulls versus bears debate when there was a short attack issued. And we had 16,000 people tune in live for that. So it's something that we're able to generate a ton of awareness, bring in more people, provide transparency for management, something retailers never had before.

BRIAN CHEUNG: So this is really interesting because, again, as you mentioned, right, the whole investor relations world is very kind of static. And so you have to dial in to some call. There's no visual element to it. But at the same time, I imagine for any publicly traded company, they almost want it to be a little bit boring. Maybe they don't want it to be accessible.

So when you interact with, for example, RICK-- and their industry might be different than, let's say, for example, a bank, right? But at the same time, what is the right balance? Because I'm sure that they would love to get more people engaged, but at the same time, you don't want to meme it into a joke.

MARK MORAN: Exactly, exactly. And so how we think about it is that the companies we work with, they have to have strong management, management that can think on their feet and be able to handle questions that aren't coming from equity research analysts. So it's something that for us, we're very experienced in the Fintwit world.

So my partner, Brian Hanly, he's the CEO and founder of Bullish Studio. Through them, we have a network of 150 different creators, target about 35 million investors monthly. So we really know the ins and outs of this world and are able to kind of know who to call on, who to get questions from, and be able to orchestrate the flow of that in a professional manner.

ALEXANDRA SEMENOVA: A lot of these financial meme accounts are more than just accounts that put out funny photos. They're actually making money on newsletters, merchandise. Can you talk about that process and how they're monetizing on what they do?

MARK MORAN: Exactly, exactly. So for liquidity, for example, majority of the money came in through advertisements via the newsletter. The newsletter's exact sum has about 160,000 subscribers, mostly in finance, also merchandise. You see some Bill Hwang T-shirts around. Everyone loves wearing those.

BRIAN CHEUNG: I need one, by the way.

MARK MORAN: Yeah, right, we'll get you one after this.

BRIAN CHEUNG: Exactly.

MARK MORAN: You, too.

ALEXANDRA SEMENOVA: And a "Pls Fix" mug.

BRIAN CHEUNG: A "Pls Fix," yeah. We need one of those. This is not doing it. This is not doing it.

MARK MORAN: Exactly, but it's something that there's never been humor in finance before, right? And especially for this younger generation, people who came into the market during COVID, you want to have a little fun. You want to have a little humor because it's this community that I think is what is driving the retail investor where the, quote unquote, "smartest" guys in the room who don't understand what's going on, there's a community there.

You look at AMC, Bed, Bath & Beyond. Is that going to continue to go? Not in full capacity, but it's always going to be there because it's just fun. If you go on Reddit, you go on Twitter, you see how these people are just there for hours a day, communicating with each other.

BRIAN CHEUNG: It's not even just meme stocks, right? Econ data gets memed all the time.

MARK MORAN: Exactly.

BRIAN CHEUNG: But it's kind of weird because for an industry that years ago was just like, OK, well, it's just numbers, right, how do you make a joke out of that? Like, when you're creating content, liquidity or not, how do you make a meme that just absolutely slaps? Like, how do you know that, like, this is the one that's going to hit?

MARK MORAN: So, one, you have to be on Twitter 24/7. You have to be feeling the pulse of what's going on, right?

BRIAN CHEUNG: No sleep in this job.

MARK MORAN: And not at all. Not at all, right? It's a lot of people don't get that part of it, Brian, but the big part is that you have to-- I mean, a meme is a form of art, essentially, that's telling a complicated story. The more layers you have to it, the more thought behind it, the better it's going to do. And so the more experience you have creating these-- I mean, I started probably two years ago back when I was a banker. Would just find some fun things to throw out there and have grown into a professional memer as I work my way up, so.

ALEXANDRA SEMENOVA: And are you going to keep at it with the memes at Equity Animal as well?

MARK MORAN: I am. When I was waiting in the lobby, I was creating a few memes, too, so definitely keeping at it.

BRIAN CHEUNG: Your drafts must be just a treasure trove of stuff.

MARK MORAN: Actually, so I don't do drafts.

BRIAN CHEUNG: Oh, you don't do drafts?

MARK MORAN: I just let it rip.

ALEXANDRA SEMENOVA: You just send them right off.

MARK MORAN: Yep, that's my strategy.

BRIAN CHEUNG: You don't have a due diligence process where--

MARK MORAN: Mm-mm.

BRIAN CHEUNG: --you have someone kind of just, like, put it on ice and look it over first?

MARK MORAN: Well, sometimes I'll send it to friends if it could be a little controversial or pushing the boundaries, and then I'll let it rip.

BRIAN CHEUNG: OK, well, if you ever create, like, a meme school, I would love to enroll. I'm a drafts guy.

MARK MORAN: OK, yeah.

BRIAN CHEUNG: So maybe I just-- I might just not have it.

ALEXANDRA SEMENOVA: I mean, I send so many into our Slack channel. I think that I would [INAUDIBLE].

BRIAN CHEUNG: Yeah, well, Alex throws me a like every now and then, but it feels obligatory sometimes.

ALEXANDRA SEMENOVA: Yeah, absolutely.

BRIAN CHEUNG: All right, Mark Moran--

MARK MORAN: Wonderful.

BRIAN CHEUNG: --CEO of Equity Animal, as well as Yahoo Finance's Alexandra Canal-- Alexandra Semenova. Thank you so much.

ALEXANDRA SEMENOVA: You gotta get that right, Brian.

BRIAN CHEUNG: There are three Alexandras here.

ALEXANDRA SEMENOVA: It's tough. I get it.

BRIAN CHEUNG: Alexandra Semenova, thanks so much. Appreciate it.