Bay Area media giant Yahoo has acquired a six-year-old San Francisco-based startup that is developing a social network for retail investors.
Yahoo announced the acquisition of CommonStock on Wednesday, but did not disclose the terms of the deal.
CommonStock was founded in 2017 by David McDonough, and the company had raised more than $34 million, including a $25 million Series A round in 2021 that was led by Coatue Management. Its other investors included QED Investors, Floodgate Fund, Upside Partnership, Resolute Ventures, Abstract Ventures, Social Capital and Bill Ackman.
The startup was valued at $115 million in 2021, according to PitchBook.
CommonStock allows users to link their brokerage accounts and post updates about their investments and trades in real time with others.
All of CommonStock's employees — 26 people as of August, according to LinkedIn — will join the Yahoo Finance team, Axios reported.
"The CommonStock team has built a trusted community, sharing high-quality insights and knowledge that help everyday investors create wealth. Together, Yahoo and CommonStock will further empower investors of all skills and levels through a one-stop shop for smart financial decisions,” Yahoo Finance President Tapan Bhat said in a statement.
Apollo Global Management bought Verizon Media, which included Yahoo and AOL, from Verizon Communications for $5 billion in May 2021.
Retail investing exploded in 2020 amid Covid-19 related shutdowns and stay-at-home orders. The craze was at least partly egged on by Reddit users in a subreddit called Wall Street Bets, where users would share their portfolios and brag about losses, not gains.
Trading platform Robinhood also boosted the popularity of retail trading over the past few years with its commission-free trades.
Wall Street Bets gained notoriety for pushing a short squeeze on GameStop in early 2021, catalyzing the age of the "meme stock." Other meme stock emerged such as AMC, Blackberry, Nokia, Naked Brand and Bed Bath & Beyond. Although, institutional investors may have also played significant role in the meme stock frenzy.
