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“I love Etsy,” Musk tweeted, by adding a follow-up Tweeter that he bought a woolen Marvin the Martian (the cartoon alien Bugs Bunny) helmet for his dog – of course, Musk someday wants to go to Mars with his other company, SpaceX.
Given that there was no further news from Etsy’s business on Tuesday morning, it seems safe to say that Musk’s tweet was the main catalyst for the stock surge.
This, of course, is ridiculous. It’s also another example of the increasingly short-term nature of the stock market, a market where algorithms can drive prices up and where individual investors using services like Robinhood are keen to make a quick buck. .
Recently, shares of companies that many professional investors are selling – because they expect stocks to go down because companies are struggling or overvalued – have instead risen on the back of traders on a popular Reddit chart. GameStop (GME), Blackberry (BB), Bed bath and beyond (BBBY), Macy’s (M) and AMC (AMC) are just a few examples.
But Etsy is nothing like these companies in that it is booming, in part because of the high demand for masks during the Covid-19 pandemic. Analysts predict that Etsy’s sales will almost double in 2020 and earnings per share have climbed more than 175%.
Musk’s tweet put a bigger spotlight on Etsy, however, and it’s not the first time he’s triggered a big move in an asset that isn’t Tesla. The price of dogecoin in digital currency emerged late last month when he touted it on Twitter.
Still, it’s a bit ironic that Etsy enjoys Musk’s endorsement. Although Tesla was finally added to the S&P 500 in December, many on Wall Street were surprised when Tesla was snubbed for the index in September. The company that was added at the time in place of Tesla? Etsy.
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