Tesla’s Elon Musk endorsing WhatsApp’s rival Signal sends stock of company with similar name flying
Thanks to the confusion, the latter’s shares surged from 60 cents, before Musk’s tweet on January 7, to 8.30 dollars on Friday. (Bloomberg Photo)
Tesla and SpaceX CEO Elon Musk, who recently topped Amazon’s Jeff Bezos to become the richest person on planet Earth, enjoys a growing influence on everyone for whom technology and business innovation matter. This was apparent, at least with respect to stock market investors who recently misinterpreted a tweet by Musk. When the billionaire technology entrepreneur asked his Twitter followers to “use Signal” – an encrypted messaging app seen as a potent competitor to Facebook’s WhatsApp, shares of a completely unrelated Texas-based technology company focusing on healthcare and industrial applications – Signal Advance – surged. Thanks to the confusion, the latter’s shares surged from 60 cents, before Musk’s tweet on January 7, to $8.30 on Friday.
Use Signal
— Elon Musk (@elonmusk) January 7, 2021
Nonetheless messaging app Signal, on Saturday, took to Twitter to let people know that they had picked the wrong signal. “It’s understandable that people want to invest in Signal’s record growth, but this isn’t us. We’re an independent 501c3 and our only investment is in your privacy.”
Is this what stock analysts mean when they say that the market is giving mixed Signals?
It’s understandable that people want to invest in Signal’s record growth, but this isn’t us. We’re an independent 501c3 and our only investment is in your privacy. pic.twitter.com/9EgMUZiEZf
— Signal (@signalapp) January 8, 2021
The development emanated from the fact that the Signal app is seeing a sudden increase in demand after WhatsApp, which has been using Signal’s encryption technology, had revised its terms on Wednesday for users asking them to let its owner Facebook and its subsidiaries collect their data such as phone number and location. The Signal was endorsed by Musk amid the fiasco that was wrongly interpreted by stock market investors. According to data analytics firm Sensory Tower, as reported by Reuters on Friday, over 1 lakh users downloaded Signal across Google and Apple app stores in the past two days while WhatsApp’s new downloads declined 11 per cent in the first seven days of 2021 vis-à-vis the week preceding week.
However, WhatsApp clarified that the changes would be for WhatsApp business accounts instead of consumer chats. “To further increase transparency, we updated the privacy policy to describe that going forward businesses can choose to receive secure hosting services from our parent company Facebook to help manage their communications with their customers on WhatsApp,” it said in a detailed statement.