Are Musk’s tweets legal after financial market confusion?

Bitcoin’s value jumped more than 20% to $ 38,566 on Friday after Elon Musk, the world’s richest person, changed his personal status on Twitter to #bitcoin, sparking speculation he had bought more than cryptocurrency.

Less than 24 hours ago, the billionaire appeared to be urging the purchase of CD Projekt, which develops the Cyberpunk 2077 computer game, to increase by more than 12% after he said on Twitter that a new Tesla model would allow passengers to play the game.

And last Tuesday, the CEO of Tesla and SpaceX fueled a frenzied rally in GameStop actions by tweeting “Gamestonk !!” With a link to the WallStreetBets Reddit forum, the word artificial refers to a combination of GameStop and “stonks,” a general term for stocks.

“There is a strange irony in Elon Musk’s ability to move the market while attacking what he sees as abnormal market forces in short selling,” said Dan Lin, analyst at Fritrade. “It may finally be the right time for a discussion on the legality of this practice.”

The tweet appears to have helped elevate the value of GameStop to over $ 10 billion in after-hours trading, and caused some hobbyist trading apps to temporarily shut down. But some people could lose a lot of money if GameStop’s share price plummets.

Vincent Flood, host of the “VideoWeek” podcast, which focuses on the advertising market, said Musk’s tweets “could have dire consequences for individual investors as he and his friends get rich at the expense of the little ones. investors “.

London entrepreneur and tech investor Rich Blythe shares this view: He told CNBC that Musk can “get rich with a tweet,” according to what Al Arabiya.net saw. “It’s innovative, but that doesn’t mean it’s above the law,” Blythe said.

“It’s always happened in the capital markets,” said Max Levy, business development manager for Nutmeg’s online investment management app, citing Warren Buffett and Ray Dalio among other “influencers”. on asset prices.

Musk had problems with the Securities and Exchange Commission for tweeting about Tesla shares in August 2018, claiming he wanted Tesla’s stock at $ 420 per share and had secured the funding to do so.

Musk and Tesla were both ordered to pay the Securities and Exchange Commission a $ 20 million fine to settle the lawsuit, and Musk has since agreed to submit his public statements on Tesla’s finances and other matters for review. by its legal advisor.

New list?

“Not only do regulators need to catch up,” said Fritriders Lane, “they need to proactively enforce the rules and clarify what is acceptable.”

Hossein Kanji, a venture capitalist in London, has confirmed that he trusts the Securities and Exchange Commission to do its job and keep the markets healthy and fair.