It’s a case of mixed signals.
Confused traders sent the stock price of an obscure medical device company up more than 400 percent in one day after Elon Musk urged them to use a messaging app of the same name.
The bizarre rally started after the billionaire Tesla chief told his 42 million Twitter followers on Thursday “Use Signal”, apparently referring to the mobile app that allows users to exchange encrypted messages.
But investors instead bought stock in Signal Advance Inc., a small Texas-based outfit that makes devices used to detect a variety of health conditions.
The company’s stock, which traded over the counter, rose to $ 3.76 on the day of Musk’s 60-cent tweet the day before. Shares nearly doubled to $ 7.19 on Friday, then shot up 438 percent to $ 38.70 on Monday despite news reports of the apparent ticker confusion.
Signal Advance did not immediately respond to a request for comment on Tuesday morning. But CEO Chris Hymel told Bloomberg News that the company “highly recommends[s] people do their due diligence and always invest with care. “
Investors looking to buy stock in the Signal app are out of luck – it’s owned by the Signal Foundation, a roughly three-year-old nonprofit.
The app has boomed in recent days since rival WhatsApp released an update to its privacy policy that allows it to share user data with Facebook, the parent company.
About 810,000 users around the world installed Signal on Sunday, nearly 18 times the number seen on January 6, the day of WhatsApp’s privacy change, according to data from research firm AppTopia.
Signal warned investors that it “has absolutely nothing to do” with Signal Advance’s stock as the latter firm’s stock price exploded.
“Understandably, people want to invest in Signal’s record growth, but we’re not,” the app said said on Twitter. “We are an independent 501c3 and our only investment is your privacy.”
With pole wires