Investors mistakenly climbed a 1100% share during the last two trading days of the week, after getting ahead of themselves when they saw a tweet from Elon Musk.
What happened: O Tesla Inc (NASDAQ: TSLA) founder and CEO on Thursday tweeted a message in support of the Signal encrypted messaging app, encouraging people to sign up. Later that day, the stock of another company called Signal soared.
That company, Signal Advance, which is traded on the over-the-counter market, saw its shares rise 527% on the first day and then another 91% on Friday. The price rose from 60 cents to $ 7.19, for a total increase of just under 1100%.
The encrypted messaging app that Musk tweeted about is not managed by a public company, but a nonprofit organization that works only with donations. He released a statement on December 8 to clear up the confusion.
“It’s understandable that people want to invest in Signal’s record growth, but it’s not us. We are an independent 501c3 and our only investment is in your privacy, “said the nonprofit.
Is that what stock analysts mean when they say the market is showing mixed signals?
It is understandable that people want to invest in Signal’s record growth, but it’s not us. We are an independent 501c3 and our only investment is in your privacy. pic.twitter.com/9EgMUZiEZf
– Sign (@signalapp) January 8, 2021
Something similar happened with Zoom’s shares on the day they became public. Due to the high expectation that the videoconferencing platform would become public, traders mistakenly bought shares in a Chinese company called Zoom Technologies Inc (OTC: ZTNO), instead of the more familiar one. Zoom Video Communications Inc (NASDAQ: ZM). The Chinese company’s stock rose 80% in the two hours of trading on that day.
Why it matters: Interest in new messaging apps has increased recently since Facebook Inc (NASDAQ: FB), WhatApp messenger has announced that it is changing its privacy policy and will be sharing user data, including phone numbers, with the parent company.
This is a mandatory policy, which all users must agree to by February 8, or they will lose access to the application.
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