American billionaire Elon Musk maintains one of the world’s most popular Twitter accounts. On the social network, the head of Tesla and SpaceX shares his company’s plans, comments on world news, posts memes, and even chatters with. But his tweets are closely watched not only by the businessman’s fans but also by investors, so the billionaire’s serious and not so serious statements have more than once led to the rise and fall of Tesla shares. In 2021, Musk proved that he can easily move quotes not only for his company. In less than two months of the new year, he managed to disperse the securities of several foreign enterprises at once, raise and crash a couple of cryptocurrencies, and also provoke several funny situations when investors mistakenly began to buy securities of completely different companies that the entrepreneur wrote about. The effect of Elon Musk in the material Lenta.ru.
Into Your Own Gates
The billionaire started a Twitter account back in 2009. Since then, he has gained an audience of almost 47 million people and published about 13.5 thousand messages. Over the years, Musk’s tweets have led to significant market movements on several occasions, but mostly in Tesla stock. So, in 2018, the April Fool’s joke of a billionaire about the bankruptcy of an electric car manufacturer sounded at an unfortunate time for the company, led to a collapse of its shares by more than five percent. Despite strenuous efforts to make money, including a desperate mass sale of Easter eggs, we are sad to report that Tesla has absolutely and completely gone bankrupt. It’s so bankrupt that you won’t even believe it, Musk wrote.
Another report said that Ilona himself was found unconscious near his Tesla Model 3, surrounded by empty Teslakilla tequila bottles. Dry tears are still visible on his cheeks. It is likely that at another time, the statement of the billionaire would not have affected Tesla’s quotes in any way. However, shortly before Musk’s announcement, the company announced the recall of more than 100,000 Model S electric cars due to problems with the power steering. Also, before the publication of the April Fool’s joke, the Tesla Model X on autopilot crashed into a bump stop on a California highway, killing the driver. At a similar time, investors considered Musk’s jokes about bankruptcy and alcohol inappropriate and rushed to sell some of the papers.
Another tweet from the billionaire, published in the same year, had even harsher consequences for both the company and the entrepreneur himself. In August 2018, Musk unexpectedly announced that he was ready to withdraw Tesla from the exchange when its shares rise to $ 420 (at the time of the announcement, they were worth about $ 350). According to Musk, funding for this operation has already been secured, but he did not name his source. The billionaire’s overconfident statement caused the company’s stock to skyrocket by more than 10 percent on the same day. Loss of traders who have had open short positions (rate decrease) on Tesla shares amounted to $ 1.3 billion, estimated in a research company S3 Partners.
After Musk’s words, outraged investors filed a class-action lawsuit against the entrepreneur, and the US Securities and Exchange Commission (SEC) accused him of fraud and market manipulation. Mask, to resolve the situation, had to leave the post of chairman of the board of directors of the company and pledge to pay a fine of $ 20 million. Also, Tesla was ordered to hire a Mask Twitter nanny a lawyer who must agree on the messages of the billionaire regarding the company before they are published on the social network. At the same time, as it became clear later, Musk’s statement about the privatization of Tesla was joking from the very beginning.
The SEC managed to find out that the billionaire, who is a famous fan of marijuana and even smoked it live in one of the American comedy shows, just wanted to amuse his girlfriend, the Canadian singer Grimes, with the help of a tweet. The fact is that the number “420” in North America is an accepted symbol of the culture of consumption of marijuana. And April 20 (or 4/20 in the American calendar) is celebrated in the United States as the day of smoking weed. A year and a half after the tweet that stripped Musk of his post at the company, Tesla stock finally surpassed the $ 420 mark.
Then Musk closed the topic with another joke about drugs. Whoa the stock is so high lol, wrote the billionaire. The tweet can be translated as WowTesla stock has gone up so much, lol. However, in a different sense, the word high means fucked up. Later, Musk continued to make loud statements about Tesla, which had serious consequences for the company. In May 2020, the billionaire wrote on Twitter that he considered the price of the electric car manufacturer’s shares too high (at that time, one paper was worth about $ 850). Following the tweet, Tesla shares immediately plummeted 10 percent and the company lost about $ 14 billion in market capitalization. The billionaire’s own fortune fell by 2.8 billion. However, literally at the next auction, the paper fully won back the fall.
Musk’s tweets raise and lower not only Tesla quotes but also shares of other companies. So, in 2016, on the eve of the end of the development of the Tesla Model 3, there were rumors that the manufacturer would start buying batteries for it from Samsung. Musk decided to deny the information on Twitter. I would like to clarify that in terms of batteries for the Model 3, Tesla works exclusively with Panasonic. News that asserts otherwise is false, ” wrote he. As a result, shares in Samsung’s SDI division, which deals with the creation of displays, batteries, and accumulators, immediately fell by more than 8 percent, and the company’s capitalization fell by more than half a billion dollars. At the same time, the quotes of Panasonic, which is a supplier of components for the Model 3, on the contrary, soared by almost 4 percent, which brought the company $ 800 million.
Musk began to move the quotes of foreign companies especially actively in 2021. In less than two months of this year, the head of Tesla has already gotten involved in the struggle of amateur investors with Reddit and professionals from Wall Street, together with his dog, he inflated the price of securities on the Etsy marketplace, raised the value of the most popular cryptocurrency in the world – bitcoin, and a lesser-known digital currency Dogecoin. In the first case, we are talking about Musk’s participation in the so-called battle for GameStop a dying American retail network selling disc consoles, discs with video games and computer equipment.
Professionals from Wall Street, anticipating the bankruptcy of the company, opened short positions on it, but the hamsters from the WallStreetBets community on Reddit decided to teach them a lesson and defend the company by artificially raising the price of its shares. In the midst of the confrontation, Musk posted just one Gamestonk word on his Twitter! and posted a link to WallStreetBets. In the message, the billionaire simultaneously played on the name of the retail network and the stock exchange meme Stonks, with the help of which on social networks, they joke about investors and businessmen performing dubious transactions in the hope of increasing profits. As a result, GameStop shares soared 130 percent, despite the billionaire’s blatant irony.
In January, Musk raised the value of Japanese video game developer Bandai Namco by posting a meme featuring the game’s character and anime, Idolmaster. On the Tokyo Stock Exchange, the company’s shares rose 4.4 percent. The billionaire then tweeted about his dog and suddenly raised the value of the Etsy marketplace. I kind of like Etsy. I bought a hand-knitted Martian helmet for my dog, wrote the billionaire. We are talking about the villain, the cruel ruler of Mars from the animated films Looney Tunes and Funny Melodies, who wants to destroy the Earth and enslave the galaxy. After his words, the share price of Etsy rose by more than 10 percent.
Musk launched powerful processes in late 2020 early 2021 in the cryptocurrency market. Back in December, the head of Tesla referred to the most popular digital currency on the planet bitcoin – as almost the same garbage as fiat money (that is, money that is not tied to precious metals). However, the billionaire quickly changed his mind. Already at the end of January, Musk, who at that time was the richest man on the planet, updated his Twitter profile description and added the hashtag #bitcoin to it. After that, the cryptocurrency has risen in price by 20 percent. About a week later it became known that Tesla had invested$ 1.5 billion in Bitcoin and is going to accept cryptocurrency as payment for electric vehicles shortly. As a result, the value of bitcoin rose by another 10 percent and then continued to rise. At the time of this writing, its price exceeded 52 thousand dollars per coin.
After that, Musk unexpectedly announced his departure from Twitter for a while but did not last a week without his beloved social network. A few days later, he returned to raise the value of Dogecoin, a cryptocurrency that he called his favorite back in 2019. It was created in 2013 in honor of the Internet meme Doge with a Shiba Inu dog. In early February, Musk posted a screenshot of The Lion King on Twitter. In the picture, the shaman-monkey Rafiki is attached to the head of Mask himself with the help of photoshop. He holds in his hands the lion cub Simba, who, in turn, has the Dogecoin logo substituted for his head. Dogecoin is the people’s cryptocurrency, wrote the billionaire. As a result, cryptocurrency has risen in price by more than 50 percent per day.
Four days later, Musk gave Dogecoin another push the head of Tesla announced that he had bought it for his youngest son. Bought some Dogecoin for little X so he could be a baby holder, reads the tweet. Hodlers are cryptocurrency investors who adhere to a buy and hold investment strategy, that is, they keep funds regardless of the market situation. But a week later, the billionaire deliberately dropped the value of the asset, calling large holders to sell most of the coins. He expressed the opinion that too high a concentration of cryptocurrency in a small number of hands is a real problem for the project. At the same time, Musk promised to support large Dogecoin owners who would take such a step. The value of the cryptocurrency then fell by 17 percent in a day.
Hand Of The Market
At the end of January, Elon Musk announced on Twitter performance on the Clubhouse audio social network, after which investors rushed to buy shares of Clubhouse Media Group, doubling their value. However, this time, the company that came to the attention of investors had nothing to do with the social network that the billionaire wrote about. The developer of the latter is a private firm, and its securities are not traded on the stock exchange. Another embarrassing situation that Musk provoked was the purchase of shares of the gold miner Sandstorm Gold by investors after the head of Tesla confessed his love for the song Sandstorm by Darude on Twitter.
The memes, jokes, and ridiculous situations in the stock market that Musk provokes amuse the billionaire’s subscribers, but they do not seem funny to Wall Street analysts. Professionals are sounding the alarm and urging the SEC to pay more attention to the activities of the billionaire and other similar stock influencers on social networks. In their opinion, while Musk jokes on Twitter and enriches himself due to the movement of shares of companies in one direction or another, retail investors are losing savings.
The massive impact one person has on the American and global markets shows that the regulator needs to rethink industry regulations and bans. The situation is such that representatives of a new kind of charismatic leaders have received a public platform for their statements and can now speak not only to boards of directors. Regulators must decide what to do with the new trend. But ultimately regulators will have to update the set of rules, said analyst Dan Lane, who works for UK-based exchange trading application Freetrade.
Markets have suffered in the past from the comments of another stock influencer, former US President Donald Trump. As head of state, he also enjoyed posting impulsive Twitter posts without prior consultation with advisers, leading to stock market crashes, massive oil price changes, and international scandals. Wall Street analysts even formulated such a thing as the Trump Index they tracked the change in the yield of US government bonds within five minutes after the president’s tweets. However, Trump’s Twitter activity has not turned out to be good. For four years in power, the politician agreed that at the beginning of January 2021 the leadership of the social network simply introduced eternal blocking of his page. What reaction will follow to Musk’s tweets remains unknown.