When couples who make their living online split up, assessing the accounts’ future value and divvying them up fairly is a drag
4 min
When Kat and Mike Stickler filed for divorce, their lawyers had a math problem.
Among the couple’s biggest assets was MikeAndKat, a channel on TikTok and YouTube in which they shared their lives with about four million followers. No one knew how to evenly split MikeAndKat between Mike and Kat.
“The judge was like, ‘what?’” Kat said last month during a podcast interview with Northwestern Mutual. “It’s a whole new terrain.”
Social media pays the bills for millions of Americans. But making a living online is more financially complicated than working a 9-to-5. Influencers need an audience to win advertising deals, and changing what they post risks turning followers away. Couples who showcase their love life online face an existential threat to the family business when they split.
For the lawyers charged with pinning a dollar value to the accounts to divide them fairly, it’s way harder than assessing a house or car. Fortunes can swing depending on which ex has the keys to the account. That was Kat’s argument in fighting for control of the TikTok channel.
“If the TikTok account was left to me, it would keep growing, but if it wasn’t, it would stop,” said Kat, 29, in the podcast interview.
She was right.
Kat got the TikTok, changed that handle to KatStickler and now has almost 10.5 million followers. She has another three million across Instagram, YouTube and Facebook. The channels, where Kat posts skits impersonating her mother and snippets of her everyday life, have earned her enough to buy a condo and become a small business investor.
Mike ended up with the YouTube account, which is now defunct. He now works in sales and declined to comment.
There are 27 million paid content creators in the U.S., and 44% of them say social media is their full-time job, consultant The Keller Advisory Group found.
The big bucks don’t come from views or followers. Brands pay influencers to recommend a product or service to their audience. U.S. advertisers paid content creators $26 billion in 2023, according to Statista.
Once divorce specialists tally up how much money the accounts are raking in, the couple can divide them, or one partner can take more and buy out the other.
But there’s one elusive factor in a digital asset’s value: the account’s potential to keep making money. Both partners have to make a case for their role in that potential. How many pranks did they think of? How many hours did they spend editing videos?
“There’s typically one person in the relationship who is passionate about social media, who’s driving the business,” says Cameron Ajdari, who runs a talent management group with his wife representing some of TikTok’s most followed couples.
It’s not always clear who that person is by the time divorce rolls around. Social media success often evolves quickly, and couples may not be prepared to track finances and labour.
Reza and Puja Khan say everything they’ve done to amass about five million followers on shared channels has been a team effort. They started posting about their wedding in 2020 and, within months, Puja was able to quit her office job. Now, they estimate social media brings in about half a million dollars a year.
Almost all of that goes into a joint bank account. It was a little overwhelming to see their incomes jump so fast, far above what their parents made, say Reza, 28, and Puja, 27. They hired a financial adviser earlier this year, but the idea of dividing their empire has never crossed Puja’s mind.
“This is the first time we’re actually thinking about it,” she says. “If I really went public with a hypothetical split, that could create its own momentum.”
The way influencers rebuild their brands after breaking up can make or break their careers.
If the person got popular by posting memes or makeup tutorials, they probably won’t take much of a financial hit from a divorce. But there could be more damage if a lot of the videos feature family time.
“One could take it over and they just rebrand, which is risky,” says Nina Shayan Depatie, a divorce attorney in Los Angeles who has worked with influencers. “When you’re looking at the valuation, you would have to consider that.”
Ayumi Lashley, 34, started creating social media videos with her husband in 2017. They made it their full-time job in 2020 and the accounts paid for her car and house, she says.
When they divorced in 2023, they both tried to elevate their personal profiles, but their fan base is still attached to a nonexistent relationship. She says she chose not to share much about the split and lost a few thousand followers, while her ex posted more about the divorce.
“A lot of people were very upset with me for not talking about it,” Lashley says. “His career is doing amazing and mine is not.”
Many content creators don’t intend to make videos of their daily outfits forever, even if it isn’t divorce that ends their careers.
“I always joke we’re like NFL players. You get five or 10 good years, but you take one bad hit to the knee and you’re done,” says Vivian Tu, 30, who posts about financial literacy to roughly eight million followers. “You can’t control the algorithms. You can’t control what is in vogue and what’s not.”
Tu says she is preparing for a life away from social media by developing other streams of income, including writing a book and hosting a podcast.
She is also aware of what divorce could do to her business. Tu wrote up a prenuptial agreement that included all her social-media accounts before she got married in June.
“My social media is my résumé,” Tu says. “Why would I allow anybody else to put my work on their résumé?”
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
The Australian leather house has opened an immersive four-day pop-up in Manhattan, unveiling its Bloom Collection and redefining what a product launch can look like.
Following the successful launch of its Palais Collection, MAISON de SABRÉ has unveiled a new modular handbag system offering more than 720 styling combinations.
Wall Street’s hottest momentum trade has reversed sharply, as former winners tumble and heavily shorted stocks surge.
3 min
Wall Street’s hottest trade has gone ice cold.
For years, it paid off to buy stocks that were rising in price—and bet against struggling shares. The momentum trade was especially profitable this year, as investors piled into hot stocks including Micron Technology, Nvidia, Advanced Micro Devices and other artificial-intelligence darlings while wagering against those likely to be hurt by the embrace of AI.
The S&P 500 Momentum Index soared 44% in the second quarter, its best quarterly performance on record, and it surged 133% over the past five years, nearly double the broad market’s performance.
Mega funds and rookie investors alike piled into the trade, some using leverage and options contracts in an effort to amplify their returns, propelling the underlying shares higher.
“It is a self-fulfilling prophecy,” said Matthew Tym, managing director at Cantor Fitzgerald, of the trade.
Suddenly, the trade is a loser. The momentum index has tumbled more than 9% since July 1, lagging behind the S&P 500’s 2.8% gain. The index—which tracks stocks in the S&P 500 based on a “momentum score”—is on track for the biggest quarterly underperformance in 25 years. July was the second-worst month for the momentum trade in around 40 years, according to Bank of America estimates; the only month worse was April 2009, in the teeth of the global financial crisis.
Hedge funds that bought momentum shares while shorting low-momentum stocks suffered even more. At the same time, a basket of the most popular stocks held by hedge funds tracked by Goldman Sachs recorded its biggest one-month underperformance in July relative to the S&P 500 in more than 20 years, according to the bank’s analysts.
Momentum trading is based on a rather simple observation: Investments that go up tend to keep outperforming; those that underperform often remain laggards. This kind of trading might seem too simple a stock-picking strategy to work. Yet it often has.
“For decades, it didn’t take a lot of sophistication to run a momentum strategy and make a decent living at it,” says Agustin Lebron, senior researcher at EquiLibre, a trading firm.
Part of the reason: It takes a while for corporate and other information to spread to various investors, so they slowly build positions, producing buying momentum.
“A huge pension fund can’t flip around its positions in a day,” says Lebron. “Behavioral biases also account for some of the effect, as well—people tend to sell their winners too early and hold losers too long.”
Fans of the strategy point to the human tendency to extrapolate from past results—and chase investment returns—noting that momentum patterns have been evident in markets for decades, even centuries. They also say that some of the worst months for momentum strategies are during longer periods of outperformance.
Some have been doing the trade by buying the strongest investments in a sector while shorting the weakest; others lean in to rising markets or asset classes. Still others use a quantitative approach or turn to banks or others who sell ways to make distinct wagers on momentum as a “tradable factor” or a “thematic basket.”
The fans remain believers. “Any strategy has disappointing periods,” says Antti Ilmanen, global co-head of the portfolio solutions group at AQR Capital Management.
The surge in Moderna and other biotech stocks helped crush the momentum trade. These shares were among the most heavily shorted in recent years, but positive news on a cancer vaccine from Moderna and Merck sent those stocks flying, crushing some quant and other hedge funds. Moderna is up around 150% so far this month.
These traders had an especially rough day on Aug. 19, which Goldman Sachs told its clients was the worst day for “systematic long-short managers” in more than two years. About half of the losses were because of momentum trades, the bank said.
Some traders have begun to short, or bet against, the very stocks that propelled the momentum trade earlier this year. Net short positions in futures tied to the Nasdaq-100 index among speculators recently climbed to some of the highest levels of the past two decades, according to data from the Commodity Futures Trading Commission.
The about-face is a sign of how markets have become more treacherous for investors, even as indexes keep climbing. Part of the issue: the recent meltdown of Situational Awareness, a hedge fund that had piled into some of the most popular momentum shares, including chip stocks. After a period of market tumult, Nvidia shares rocketed almost 9% after its earnings, showing how quickly sentiment can shift.
Some investors say the run-up in share prices driving tech stocks higher reminds them at times of the dot-com frenzy decades ago.
Mike Ogborne, the founder of San Francisco-based Ogborne Capital Management, said he has grown more cautious on technology stocks and is keeping more of his portfolio in cash than he typically does.
And he is nervous about the surge in spending by technology giants and quarterly capital expenditures that keep rising.
“It is a little bit like Cinderella and the clock striking midnight. You don’t know when midnight is going to come around,” Ogborne said. “They don’t send a memo around telling you when the capex cycle is over.”
