Elon Musk’s power is such that a tweet can trigger a stock’s actions to skyrocket. Even from the wrong company.
Signal Advance’s stock soared after Tesla’s CEO tweeted “Use Signal” early on January 7. Musk probably referred to Signal, the encrypted messaging service and application. It was developed by a non-profit organization, the Signal Foundation, and is not a publicly traded company.
Investors and fans of the South African billionaire quickly bought shares in Signal Advance, a technology component manufacturing company based in Rosharon, Texas, which trades under the SIGL symbol in over-the-counter markets, but has nothing to do with the messages or with Musk himself.
Prior to Musk’s tweet, Signal Advance’s shares had not risen above 60 cents. Due almost entirely to investor signals being crossed (sorry), the stock closed at $ 3.76 on January 7 and $ 7.19 on January 8. The momentum accelerated further yesterday, pushing the closing price to $ 38.70, an increase of 6,350% in three trading sessions. (He returned to earth a little this afternoon and was trading for about $ 12 at the time of publication.)
The wrong trades further increased the current value of Signal Advance. It is so small that it did not have to send financial information to the SEC for 2020. In December 2019, it did not record revenue and a net loss of $ 125,400, but it is now worth more than $ 3.5 billion, according to Factset.
Investors pouring money into the wrong company also happened early last year, when Zoom Technologies’ shares rose due to similar confusion after positive news about remote conferencing services company Zoom Video Communications. In March, shares in the Chinese holding company, which trades under the ZOOM symbol, skyrocketed from $ 1.10 to a $ 60 intraday high. Zoom Video Communications is traded as ZM on NASDAQ.