“I quite like Etsy,” Musk tweeted, add in a follow-up tweet that he bought a woolen helmet Marvin the Martian (the stranger from the Bugs Bunny cartoons) for his dog – as Musk of course wants to go to Mars with his other company, SpaceX, one day.
Since there was no other industry news from Etsy on Tuesday morning, it seems safe to say that Musk’s tweet was the primary catalyst for the stock’s rise.
This is ridiculous, of course. It is also another example of the increasingly short-term nature of the stock market, one in which algorithms can increase prices and individual investors who use services such as Robinhood want to earn quickly.
Recently, shares of companies that many professional investors are short of are rising – because they expect the shares to fall because the companies are struggling or overvalued – thanks to the support of traders on a popular Reddit board. 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 because it thrives, in part because of the strong demand for masks during the Covid-19 pandemic. Analysts predict that Etsy’s sales nearly doubled in 2020 and that earnings per share rose more than 175%.
However, Musk’s tweet put a bigger spotlight on Etsy, and this is not the first time he has unleashed a big step in a non-Tesla asset. The price of dogecoin in the digital currency rose late last month when it announced it on Twitter.
Still, it’s a bit ironic that Etsy benefits from Musk’s endorsement. Although Tesla was finally added to the S&P 500 in December, many on Wall Street were surprised when Tesla was slammed for the index in September. The company that was added instead of Tesla at the time? Etsy.