Elon Musk tweeted 'Use Signal' and investors sent wrong stock soaring 6,350%

"Use Signal," the Tesla chief executive officer wrote on Twitter on Jan 7.
"Use Signal," the Tesla chief executive officer wrote on Twitter on Jan 7.PHOTOS: AFP, ELONMUSK/TWITTER

NEW YORK (BLOOMBERG) - A two-word app recommendation from Elon Musk has turned into a massive rally in the shares of a tiny medical device company in another case of mistaken identity.

"Use Signal," the Tesla chief executive officer wrote on Twitter on Jan 7, apparently referring to the encrypted messaging service.

Despite reports about the confusion on Friday, shares of the Texas-based company soared as much as 885 per cent on Monday (Jan 11) to US$70.85, before ending up 438 per cent at US$38.70. This from a closing price of 60 cents on Jan 6, a day before Mr Musk's tweet.

That was enough to push Signal Advance's rally 6,350 per cent in three trading days giving it a market valuation of US$390 million (S$518.7 million).

"We strongly recommend people do their due diligence and always invest with care," the company's chief executive officer, Dr Chris Hymel, said when reached by phone on Monday. Signal Advance doesn't have an association with Musk or the Signal app, he said.

Signal Advance hasn'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.

The misunderstanding is the latest example of ticker mixup. The popularity of Zoom Video Communications in recent years resulted in brief surges in the shares of Zoom Technologies., after traders confused its ticker symbol ZOOM with that of the video-conferencing company. Zoom Technologies, a Beijing-based maker of mobile phone components, later changed its ticker to ZTNO.

The other Signal is a closely held not-for-profit organization with a messaging service that's similar to Facebook's WhatsApp.

In response to a comment on Twitter, Mr Musk said he donated to Signal a year ago and plans to give more in the future.

With additional information from The Straits Times