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The power of Elon Musk is such that a tweet can make the shares of a stock skyrocket. Even bad business.
Signal Advance shares skyrocketed after Tesla CEO tweeted “Use Signal” early on January 7. Musk probably meant Signal, the encrypted messaging service, and the app. It was developed by a non-profit organization, 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 Rosharon, Texas-based technology components manufacturing company that trades under the symbol SIGL in the over-the-counter markets but has no connection with the messaging app or Musk himself.
Prior to Musk’s tweet, Signal Advance shares had not gone above 60 cents. Due almost entirely to the crossing of investor signals (sorry), the stock closed at $ 3.76 on January 7 and $ 7.19 on January 8. Momentum picked up again yesterday, pushing the closing price to $ 38.70, an increase of 6350% over three trades. sessions. (It came back to earth a bit this afternoon and was trading around $ 12 at time of publication.)
The erroneous transactions further increased the current value of Signal Advance. It’s so small that it didn’t have to submit financial information to the SEC for 2020. As of December 2019, it didn’t record any revenue and a net loss of $ 125,400, but is now worth over $ 3.5 billion, according to Factset.
Investors pouring money into the wrong company also occurred early last year, when Zoom Technologies shares soared due to similar confusion following positive news about the company from remote conferencing services, Zoom Video Communications. In March, shares of the Chinese holding company, which trades under the ticker symbol ZOOM, rose from $ 1.10 to an intraday high of $ 60. Zoom Video Communications is marketed as ZM on NASDAQ.
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