Elon Musk, CEO of Tesla, stands on the construction site of the Tesla Gigafactory. In Grünheide near Berlin, 3 September 2020.
Patrick Pleul | picture alliance | Getty Images
When Tesla CEO Elon Musk on Thursday urged his Twitter followers to use Signal, he meant the encrypted messaging program. Some people seem to have misused it.
Shares of an obscure and unrelated company called Signal Advance, which traded over the counter, rose 527% on Thursday and another 91% on Friday, rising from 60 cents to $ 7.19.
The signal Musk refers to is operated by a non-profit organization and serves as an alternative to SMS applications such as Facebook Messenger, WhatsApp and Apple’s messaging service. The Signal went to Twitter on Friday to explain that it had nothing to do with Signal Advance.
“It’s understandable that people 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.”
This is a well-known problem on Wall Street.
In April 2019, on the day Zoom Video Communications held its highly anticipated market debut under the ZM symbol, a Chinese company called Zoom Technologies jumped more than 80% in two hours of trading. The stock gave up most of the gains that day, closing 10%.
Six years earlier, while investors were waiting for the Twitter exchange, shares of Tweeter Home Entertainment Group rose more than 1,000%.
Signal Advance was founded in 1992 under the name Biodyne in Texas and provided services to medical and legal workers. The company shifted its focus to the use of healthcare technology and changed its name to Signal Advance. The thinly traded stock hit the market in 2014.
Signal Advance is so small that it does not report finances to the SEC. As of March 2019, he had no full-time employees other than CEO Chris Hymel, who did not immediately respond to a request for comment.
Due to the unintended investor interest, the company has a market capitalization of $ 660 million, compared to $ 55 million two days ago. Prior to Thursday, the stock had traded below $ 1 since 2015.
The Signal messaging app, backed by the Signal Technology Foundation, “runs entirely on donations,” according to a New Yorker article published in October.
The group had other concerns after Musk’s tweet to his more than 41 million fans. Signal said Thursday there are technical issues with verifications because “so many new people are trying to join.”
Both the technical snafu and the wild trading of an unrelated stock underscore the growing influence of Musk. On Thursday, it became the richest person in the world thanks to Tesla’s nearly 800% increase in market capitalization over the past year. Tesla on Friday became the fifth most valuable public company in the U.S., surpassing Facebook.
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