Elon Musk, CEO of Tesla, stands on the construction site of the Tesla Gigafactory. In Grünheide near Berlin, September 3, 2020.
Patrick Pleul | Image Alliance | Getty Images
When Elon Musk, CEO of Tesla, asked his Twitter followers on Thursday to “use Signal”, he meant the encrypted messaging app. Some people seem to have got it wrong.
Shares of an obscure and independent company called Signal Advance, which trades over the counter, rose 527% Thursday and another 91% on Friday, 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 SMS apps like Facebook Messenger, WhatsApp, and Apple’s messaging service. That signal went to Twitter on Friday to clarify that it has nothing to do with Signal Advance.
“It’s understandable that people would want to invest in Signal’s record growth, but it’s not us,” Signal wrote. “We are an independent 501c3 and our only investment is in your privacy.”
It’s a known problem on Wall Street.
In April 2019, the day Zoom Video Communications made its much-anticipated market debut under the ticker symbol ZM, a Chinese company called Zoom Technologies rose more than 80% in two hours of trading. The stock gave up most of those gains that day, closing 10%.
Six years earlier, as investors waited for Twitter to go public, shares in Tweeter Home Entertainment Group rose more than 1,000%.
Signal Advance was founded in Texas in 1992 under the name Biodyne and provided services to medical and legal professionals. The company shifted its focus to the use of technology in healthcare and changed its name to Signal Advance. The thinly traded stock hit the market in 2014.
Signal Advance is so small it doesn’t file any financial information with the SEC. As of March 2019, there were no full-time employees other than CEO Chris Hymel who did not immediately respond to a request for comment.
Due to the swarm of unintended investor interest, the company now has a market cap of $ 660 million, down from $ 55 million two days ago. As of Thursday, the stock had traded below $ 1 since 2015.
The Signal Messaging app, supported by the Signal Technology Foundation, “runs on donations only,” said a New York article published in October.
The group had other concerns after Musk tweeted his 41-plus million followers. Signal said Thursday there were technical issues with reviews because “so many new people are trying to join”.
Both technical snafu and frantic trading in an unrelated stock underscore Musk’s growing influence. On Thursday, he became the richest person in the world thanks to Tesla’s nearly 800% increase in market cap last year. On Friday, Tesla became the fifth largest public company in the United States, surpassing Facebook.
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