CNBC reported that the wrong stock is experiencing a surge in stock prices as Elon Musk tweeted “Use Signal”.
It started when Musk left a message on Twitter, “Use Signal” on January 7th. Instead of the message app ‘WhatsApp’, Musk ordered to use its competitor ‘Signal’ . This was a complaint that WhatsApp, a Facebook subsidiary, changed the terms and conditions. So that the user needs to share their personal information or they wont be able to use WhatsApp service.
However, investors who saw the tweet began to buy shares of Signal Advance, a healthcare technology company that is also unfamiliar with the state’s name. The message app signal mentioned by Musk is an unlisted company.
The stock, only 60 cents per share on the previous day of Musk’s tweet, jumped 527 percent the following day. The upward trend continued and the stock soared 438 percent on the same day, reaching $38.70 per share. Market Watch reported that after the Musk tweet, Signal Advance’s stock rose more than 5,600 percent.
CNBC said on the 4th that the stock was stagnant for a single week, but the trading volume exceeded 2 million shares on the same day.
Signal Advance did not record sales at all in 2015 and 2016, but it is now a company with a market capitalization of $3.5 billion.
Elon Musk wrong “Signal”, the sign of “bubbly” market
This has been the case before. Zoom, which provides videoconferencing services through the pandemic, drew attention. But instead of their stock, the stock price of Zoom Technology, another company, soared as well as its name was similar.
Deutsche Bank’s market strategist Jim Reid said, “Signal Advance’s stock price has risen by 1,500% in the 24 hours after Musk’s tweet”. “This blind stock buying craze by investors is an example of how bubbly the market is now,” he added.
“In a few years, we will know if 2020-2021 is a historic asset price bubble like the 1929 Great Depression and the 2000 IT Bubble,” he said. “If it turns out to be a bubble, the stock price movement of Signal Advance will probably remain as an example.”