Move over Warren Buffet, a new market sage has the ear of investors. At least, investors interested in buying joke cryptocurrencies.
That’s right: Elon Musk. A tweet to his 45 million Twitter followers sent “meme” cryptocurrency Dogecoin soaring on Thursday.
The Tesla boss and SpaceX founder was a vocal supporter of the Reddit crowd during the GameStop saga, and one word of his can send investors piling into a company’s stock.
Where does Musk’s market-moving power come from? He is a deeply attractive figure to many amateur investors, who see him as a genius maverick whose electric-car company Tesla has defied Wall Street naysayers.
On top of that, people can trade the savings they’ve built up during lockdown on commission-free apps such as Robinhood. So why not follow where Musk leads?
Neil Wilson, chief market analyst at UK trading platform Markets.com, told Insider he thinks it’s “worrying in some ways that people’s financial interests are at the whim of his tweets – but it’s up to them if they want to be in those assets.”
Read more: A hedge fund manager who wrote a definitive book on short-selling breaks down how his strategy helped him evade the squeeze on GameStop – and shares what types of stocks he’s buying and shorting now
Good or bad, investors are increasingly aware of Musk’s tweets. Here are 6 times he’s moved markets.
1. Elon Musk sent Dogecoin soaring 60% in minutes with a tweet
On Thursday, cryptocurrency Dogecoin soared as much as 59% in moments.
Why? Because Elon Musk returned to Twitter after a two-day absence to post a picture based on the movie Lion King which showed him holding up Doge, the meme Shiba Inu dog upon which Dogecoin is based.
The digital currency touched as high as $0.0579 on Thursday, although this was some way from the all-time high of $0.0792 reached in January. As of Friday morning, Dogecoin was down around 11% to $0.0457.
2. Musk helped power the GameStop frenzy
One of Musk’s most high-profile interventions in the markets came at the end of January, when he waded into the day-trading frenzy that sent GameStop shares soaring and battered hedge funds.
On January 26 after markets closed, and as interest in GameStop shares picked up among day traders on social network website Reddit, Musk simply tweeted “Gamestonk!!” with a link to the Reddit forum Wall Street Bets.
Video: Sorry Elon Musk: Jim Cramer ‘Remains Committed’ to Bitcoin (TheStreet)
The next day, GameStop’s shares rocketed as much as 157% and closed 135% higher, with Wall Street Bets members widely discussing Musk’s tweet. GameStop tumbled a week later, however, to $70.15 on Friday.
The Wall Street Journal reported that one hedge fund who had bet on GameStop decided to get out after Musk’s tweet. Senvest Management ended up making $700 million.
Read more: ‘Everything’s turned completely upside down’: A 41-year market vet breaks down why we’re hurtling toward a 40% crash as rampant speculation reaches dangerous heights – and says the market is due for 5-10 years of negative returns
3. The Tesla chief sent investors piling into the wrong Signal
One of the more bizarre examples of Musk’s market-moving power saw investors pile into a firm called Signal after the SpaceX boss tweeted about it. The only problem was, it was the wrong Signal.
Shares of Signal Advance, a small medical technology company, soared more than 11,000% to as high as $70.85 from $0.60 before Musk’s tweet.
Investors seemed to have confused Signal Advance with the encrypted messaging platform that Musk praised in a two-word message: “Use Signal.”
4. He caused Bitcoin to spike with a hashtag
Bitcoin is a big market, with a capitalization of more than $600 billion. But Musk sent the price of each coin soaring more than 15% at the end of January by simply adding the word “#bitcoin” to his Twitter profile.
The Bitcoin price spiked to as high as $38,406 on January 29, having spent most of the week in a range between $31,000 and $33,000.
Edward Moya, senior market analyst at currency platform Oanda, said in an note: “Bitcoin got lost in the GameStop mania and Musk’s tweet brought cryptos back into the limelight.”
Bitcoin was up around 3% on Friday morning to $38,103.
5. Arts-and-craft retailer Etsy got caught up in the Musk effect
Etsy’s shares jumped as much as 8% on January 26, although they closed lower.
What was behind the spike? Why, Elon Musk saying he had bought a “hand knit wool Marvin the Martian” helmet for his dog, of course.
His satisfaction with his purchase caused the Tesla chief to tweet “I kinda love Etsy” and for the company’s share price to promptly rally in early trading.
6. Musk’s techno tweet boosts obscure gold miner
It’s perhaps the strangest of Musk’s market-moving moments. In his return to Twitter last week, he said “Sandstorm is a masterpiece”, likely referring to the hit 2000 song by Darude.
Day traders went searching for meaning in the stock market, sending shares in Sandstorm Gold – a $1.3 billion Canadian gold miner – soaring as much as 55% in pre-market trading.
The rally was short-lived, however, with the stock down 1% just before normal trading opened.