Tesla CEO and SpaceX boss Elon Musk may have given out mixed signals.
An obscure medical device company called 'Signal Advances' stock prices surged more than 400 percent on Monday, and Elon Musk may be the only reason.
It started on January 7, when the tech mogul and currently world's richest person, tweeted two simple words from his Twitter account to his 42 million followers. "Use Signal."
— Elon Musk (@elonmusk) January 7, 2021
What Musk referred to was the messaging app 'Signal' as an alternative to WhatsApp which has recently come under controversy for its change in privacy rules sparking concerns.
What investors, however, mistook it for the stock share of a company called 'Signal Advance Inc.' and invested in it. According to Bloomberg, by the end of the day, Signal Advance Inc. shares had surged more than sixfold. That was enough to push Signal Advance's rally more than 5,100% in three trading days giving it a market valuation of $390 million.
Despite reports about the confusion on Friday, the stock has continued to rally. Shares of Texas-based company surged as much as 885% on Monday before paring the gains.
The CEO of Signal Advances Inc cleared the confusion in a public statement, and said "We strongly recommend people do their due diligence and always invest with care." The CEO, Dr. Chris Hymel, also added that "Signal Advance doesn't have an association with Musk or the Signal app."
Signal Advance hadn't filed an annual report with the Securities and Exchange Commission since 2019. The company had no revenue from 2014 to 2016, according to the filing, further reported Bloomberg.
Investors looking to buy stock in the correct 'Signal,' however, are out of luck — it’s owned by the Signal Foundation, a three-year-old nonprofit.
Signal is an instant messaging app developed by non-profit organisation called Signal Foundation. The app was launched in 2014 as a messenger focused on privacy. Signal's tagline is also "say hello to privacy." Signal also comes with end-to-end encryption like WhatsApp and is available for all devices including Android, iPhone, iPad, Windows, Mac, and Linux.
Signal Foundation, the company that has made Signal Private Messenger was set up by former WhatsApp co-founder Brien Acton who had parted ways with WhatsApp in 2017. While Signal does provide pretty much all similar features to WhatsApp, it does not allow back up of chats on Google Drive or iCloud. Further, it does not allow groups to add people automatically unless the individuals give their assent.