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  4. Musk’s advice helps the wrong business’s value soar 5,643 per cent
13 January 2021 12:42:07

Musk’s advice helps the wrong business’s value soar 5,643 per cent

The words of Tesla and SpaceX CEO Elon Musk are read voraciously by his millions of Twitter followers. Sometimes they can be misconstrued and in this case, a company he never referred to saw its stock rise 5,643 per cent, with more than two million shares changing hands. Whether those investors to Signal Advance will ever get their money back, only time will tell, but they are on a tidy fortune right now.

On 7 January, Musk responded to a tweet about the messenger app Signal, which describes itself as an open-source service developed by the Signal Foundation and Signal Messenger around 2014. It experiences usership pick up during periods of political upheaval.

Signal is an encrypted messaging app funded by a not­-for­-profit organisation, and an alternative to WhatsApp. Signal is a private company and is not listed on any stock market. However, there is a Texas-­based biotechnology company called Signal Advance.

Later that same day, Signal Advance saw its stock leap 527 per cent and reach a high of US$3.76 per share. On 6 January, the day before Musk’s tweet, its shares were trading at US$0.60.

Signal Advance has continued to soar, rising 5,643 per cent and pushing its market valuation to US$3.2 billion from US$55 million as of last Wednesday. In addition, on 11 January, Signal Advance saw its highest trading volume since going public in 2014. More than two million shares changed hands, while previously on 4 January, not a single share of the stock was traded, Market Watch reported.

The company, founded by Dr Chris Hymel, reported receiving no revenue in 2015 and 2016, and is now worth more than US$3 billion. Signal Advance is so small it didn’t have to submit financial information to the SEC for 2020. In December 2019, it recorded no revenues and a net loss of US$125,400.

Meanwhile, Musk has a 20.8 per cent holding in Tesla, which makes him the majority shareholder. The electric automaker has gained more than 700 per cent in its valuation since last year, helped by increased sales figures and its ability to scale production to meet demand, which is as high as it’s ever been. Tesla is building new manufacturing plants in Berlin, Germany and Texas, US.

Musk is now the world's richest person.

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