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.”
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.
Read More: Investors are flocking to trade Dogecoin and other hot digital tokens on Voyager. Its CEO says Bitcoin will hit $100,000 this year
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.
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.
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…