- A vaguely worded tweet from billionaire Elon Musk has caused the share price of a virtually unknown company to skyrocket
- In response to a mass exodus of users from WhatsApp, Musk encouraged his followers to “Use Signal”
- While he meant the encrypted messaging app Signal, investors misinterpreted the tweet to mean Signal Advance, a medical device firm
- The ensuing avalanche of share-buying caused the company’s stock to rise by a whopping 11,708 per cent across three days
- Many investors have since realised the mistake, and sold off their shares in Signal Advance en masse
A vaguely worded tweet from billionaire Elon Musk has caused the share price of a virtually unknown company to skyrocket.
The world’s richest man was responding through social media to a mass exodus of users from popular instant messaging application, WhatsApp.
WhatsApp had just announced some controversial changes to its privacy policy, allowing the app to share the personal data of its users with its parent company Facebook, for advertising purposes. Users would either have to accept the new terms before February 8, or have their accounts deleted.
Eager to redirect the many users exiting WhatsApp, Musk tweeted a simple two-word message to his 42 million followers, encouraging them to “Use Signal”. While he was referring to the encrypted messaging app called Signal, that is not how many followers saw it.
Many investors misinterpreted the tweet to mean Signal Advance, a small medical device firm in America. As such, the previously unknown company was overwhelmed overnight by a sudden and very unexpected surge in investors.
The ensuing avalanche of misguided share-buying caused Signal Advance’s stock to rise by a whopping 11,708 per cent across three days. The company’s market value, which had previously been around US$55 million (approximately A$71 million) skyrocketed to over US$6 billion (roughly A$7.7 billion).
Many investors have since realised the mistake, and sold off their shares in Signal Advance en masse. The company’s market value has now dipped back down to about US$1.05 billion (approximately A$1.36 billion).
Despite the investors’ regret-fuelled sell-off of shares, Signal Advance’s market value is still 20 times higher than it was before the misunderstanding. It remains to be seen how much of this value will stick around as Musk’s dangerously loyal followers realise the error of the “buy now, think later” tactic.