Such is the power of Elon Musk that one tweet can send the shares of a stock soaring. Even of the wrong company.
Shares of Signal Advance skyrocketed after the Tesla CEO tweeted “Use Signal” early on Jan. 7. Musk likely meant Signal, the encrypted messaging service and app. It was developed by a non-profit, the Signal Foundation, and is not a publicly traded company.
Investors and fans of the South African billionaire quickly bought shares of Signal Advance instead, a technology component manufacturing company headquartered in Rosharon, Texas which trades under the ticker SIGL on over-the-counter markets but has no relationship to the messaging app or Musk himself.
Prior to Musk’s tweet, shares of Signal Advance hadn’t climbed above 60 cents. Due almost entirely to investor signals being crossed (sorry), the stock closed at $3.76 on Jan. 7, and $7.19 on Jan. 8. Momentum accelerated even further yesterday, pushing the closing price to $38.70, an increase of 6350% over three trading sessions. (It has returned to earth a bit this afternoon, and was trading around $12 at the time of publication.)
The mistaken trades still increased the current value of Signal Advance. It is so small it didn’t have to submit financial information to the SEC for 2020. In December 2019, it recorded no revenues and a net loss of $125,400, but is now worth more than $3.5 billion, according to Factset.
Investors pouring money into the wrong company also happened early last year, when shares of Zoom Technologies climbed due to similar confusion following positive news about the remote conferencing service company, Zoom Video Communications. In March, shares of the Chinese holding company, which trades with the ticker symbol ZOOM, soared from $1.10 to an intraday high of $60. Zoom Video Communications trades as ZM on NASDAQ.