Elon Musk regularly tweets jokes about stock and cryptocurrency deals. But with great influence, he can dominate the market and earn billions of dollars.
On the morning of August 17, Elon Musk – the world’s richest billionaire – wrote on Twitter that Manchester United would return to his hand as a shock deal. However, only half a day later, he himself admitted it was a joke.
Musk’s influence
Four years ago, the Tesla boss said on Twitter that he would take Tesla private by buying back all of its shares.
After this action, he had to pay a civil penalty of $20 million and give up his role as chairman of the Board of Directors for at least 3 years for spreading news that influenced the market.
In 2019, Tesla’s stock price once again became a joke of the billionaire. A year later, Musk tweeted again that “Tesla stock price is too high” and caused the price to immediately plummet by 10%.
In early 2021, Elon Musk posted a picture of the character Sachiko Koshimizu in the Idolmaster game series. The photo helped the stock price of Bandai Namco Holdings – the company that develops the game – up 4.4%.
Towards the end of January of that year, the Tesla CEO posted on Twitter “I love Etsy” after buying the company’s woolen hat for his dog. Etsy’s stock price spiked 8% after the post.
When Elon Musk changed the introduction on his Twitter profile to “#bitcoin”, the price of Bitcoin also skyrocketed. His support for the coin was a key driver of the crypto market’s phenomenal growth last year.
He also caused a stir in the market when he wrote “Gamestonk!!” on Twitter and linked to the WallStreetBets group on Reddit. Hours later, GameStop’s stock price spiked 60%, pushing the company’s market capitalization to more than $10 billion in trading. Worth mentioning, that this is the period when GameStop recorded a continuous decline in revenue.
The Tesla boss also pushed the price of Dogecoin – the cryptocurrency started as a joke. Last year, the price of Dogecoin continuously hit new highs after Musk tweeted about the coin.
Elon Musk even affects the market unknowingly. When he tweeted “use Signal,” referring to an encrypted messaging app, the stock price of Signal Advance, a Texas medical device maker, jumped 5,100% in three trading days.
Back to the story of Manchester United, the share price of the company Manchester United Plc has increased from $12.68/share to $12.92 after Musk’s tweet. But to date, the price has dropped to $12.78.
Behind the tweets
The question is whether Musk can profit from a few seemingly indifferent tweets.
Elon Musk has repeatedly been accused of manipulating the Bitcoin price to “buy the bottom, sell the top.” Mati Greenspan, founder of Quantum Economics said:
“Elon and his fleet have incredible power over market prices.”
Economist Nouriel Roubini even called Musk’s deliberate tweets “criminal.” He described investing in Bitcoin and driving the price up as “irresponsible and manipulating the market”.
Professor Scott Galloway at NYU Stern School of Business said that Elon Musk advised his hundreds of millions of followers to buy cryptocurrencies and then sell them to profit for the company.
This year, Musk’s intention to acquire the social media platform Twitter was also controversial. On April 25, the Twitter board agreed to a $44 billion buyout offer from Tesla CEO Elon Musk. Accordingly, Twitter will be sold to Musk for $54.2 per share. But in July, the billionaire announced the cancellation of the plan to buy the social network.
According to attorney Matt Levine, the announcement that he bought Twitter and then canceled it could also be a joke by Elon Musk.
Others believe that behind the spinning Twitter like a pinwheel, Musk is just looking for a good reason to sell off Tesla shares.
In April, he sold Tesla shares to raise money to buy Twitter. In August, Elon Musk sold another 7.92 million shares worth $6.9 billion to the electric car company. The CEO said he wants to prevent an emergency stock sale if forced to complete the Twitter acquisition.
Last November, he opened a poll on Twitter, asking his followers if they should cut their stake in electric car maker Tesla.
To date, Elon Musk has sold about $32 billion worth of Tesla stock over the past 10 months. That could be a wise decision as the electric car company’s stock price has plunged about 20% since the beginning of the year. Professor Scott Galloway commented:
“Our elevation of Musk as a capitalist idol has distorted the flow of capital and talent. Healthy markets don’t take cues from the tweets of one man.”
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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CoinCu News
