Investors mistakenly ran up a stock 1100% during the last two days of the week’s trading, after getting ahead of themselves when they saw a tweet from Elon Musk.
What Happened: The Tesla Inc (NASDAQ: TSLA) founder and CEO on Thursday tweeted a message of support for the encrypted messaging app Signal, encouraging people to sign up. Later that day, the shares of another company called Signal shot up.
That company, Signal Advance, which is traded over-the-counter, saw its shares rise 527% the first day, and then another 91% on Friday. The price went up from 60 cents to $7.19, for a total rise of just under 1100%.
The encrypted messaging app Musk tweeted about is not managed by a public company, but a non-profit organization run on donations only. It released a statement on Dec. 8 to clear up the confusion.
“It’s understandable that people want to invest in Signal’s record growth, but this isn’t us. We’re an independent 501c3 and our only investment is in your privacy,” the non-profit said.
Is this what stock analysts mean when they say that the market is giving mixed Signals?
It’s understandable that people want to invest in Signal’s record growth, but this isn’t us. We’re an independent 501c3 and our only investment is in your privacy. pic.twitter.com/9EgMUZiEZf
— Signal (@signalapp) January 8, 2021
A similar thing happened to Zoom stock on the day it went public. Due to high anticipation for the video conferencing platform going public, traders mistakenly bought shares of a Chinese company called Zoom Technologies Inc (OTC: ZTNO), instead of the more familiar Zoom Video Communications Inc (NASDAQ: ZM). The shares of the Chinese company rose by 80% in two hours of trading that day.
Why It Matters: The interest toward new messaging apps has risen recently since Facebook Inc (NASDAQ: FB)-owned messenger WhatApp announced it is changing its privacy policy and will be sharing users’ data, including phone numbers, with the parent company.
This is a mandatory policy, which all users must agree to by Feb. 8, or they will lose access to the app.
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