Elon Musk, CEO of Tesla, is on the construction site of the Tesla Gigafactory. In Grünheide near Berlin, September 3, 2020.
Patrick Pleul | photo alliance | Getty Images
When Tesla CEO Elon Musk urged his Twitter followers to “use Signal” on Thursday, he was referring to the encrypted messaging app. Some people seem to have taken it wrong.
Shares of an obscure and unrelated company called Signal Advance, which trades over-the-counter, were up 527% on Thursday and a further 91% on Friday, climbing from 60 cents to $ 7.19.
The signal Musk was referring to is operated by a non-profit organization and serves as an alternative to text messaging apps like Facebook Messenger, WhatsApp and Apple’s messaging service. That Signal took to Twitter on Friday to make it clear that it has nothing to do with Signal Advance.
“Understandably, people want to invest in Signal’s record growth, but we are not,” Signal wrote. “We are an independent 501c3 and our only investment is your privacy.”
It’s a known issue on Wall Street.
In April 2019, on the day Zoom Video Communications made its long-awaited market debut under the ticker symbol ZM, a Chinese company called Zoom Technologies jumped more than 80% in two hours of trading. The stock gave up most of those gains that day, closing at 10%.
Six years earlier, as investors awaited Twitter’s IPO, Tweeter Home Entertainment Group’s shares were up more than 1,000%.
Signal Advance was founded in Texas in 1992 as Biodyne and provided services to medical and legal staff. The company shifted its focus to the use of technology in healthcare and changed its name to Signal Advance. The scarcely traded stock hit the market in 2014.
Signal Advance is so small that it does not report any financial data to the SEC. As of March 2019, it had no full-time employees other than CEO Chris Hymel, who did not immediately respond to a request for comment.
Due to the swarm of inadvertent interest from investors, the company now has a market cap of $ 660 million, up from $ 55 million two days ago. Before Thursday, the stock has been trading below $ 1 since 2015.
The Signal messaging app, supported by the Signal Technology Foundation, “runs entirely on donations,” said a New Yorker article published in October.
The group had other concerns after Musk’s tweet to its more than 41 million followers. Signal said on Thursday that there were technical issues with verifications because “so many new people are trying to join.”
Both technical snafu and wild trade in an unrelated stock underscore Musk’s growing influence. On Thursday, he became the world’s richest person thanks to the rise in Tesla’s market capitalization by nearly 800% in the past year. On Friday, Tesla became the fifth most valuable publicly traded company in the US, past Facebook.
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