Earlier this month, Tesla (NASDAQ:TSLA) revealed in a regulatory filing that it had invested $1.5 billion in Bitcoin (CRYPTO:BTC). The announcement itself caused the cryptocurrency to climb 16% to a new all-time high. This isn’t the first time a move by Tesla’s enigmatic founder Elon Musk has moved markets.
On this clip from Motley Fool Live recorded on Feb. 8, “The Wrap” host Jason Hall, Fool analyst Auri Hughes, and Fool.com contributor Danny Vena recount other instances when a move or a tweet by Musk has caused an exaggerated reaction.
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Jason Hall: Danny, you’ve got an interesting little take here on the whole Tesla buying Bitcoin thing in relation to Elon Musk.
Danny Vena: One of the things that I was most fascinated by was not the fact that Elon Musk said Tesla owned $1.5 billion in Bitcoin, it was the market’s reaction to it.
Right after that story hit the wire, Bitcoin increased in value by 16%, which is bizarre. But it didn’t stop there. It wasn’t just Bitcoin that went up, but from there, PayPal (NASDAQ:PYPL), who just recently announced that they’re going to allow users to hold Bitcoin, gained almost 5%. Square (NYSE:SQ), which not only allows people to hold Bitcoin but also allows them to use it as a payment method, is up about 8%.
This is a little bit more of Musk being a market mover. It’s not the first time it happened. You might remember back in January, he referenced the Signal messaging app. [laughs]
Jason Hall: My gosh, do you remember this, Auri?
Auri Hughes: No.
Jason Hall: Go ahead, Danny.
Danny Vena: Elon Musk said he had high praise for the Signal messaging app, when they started talking about what was going on with Instagram.
Jason Hall: Facebook (NASDAQ:FB) said WhatsApp was going to have to start sharing more user data. He tweeted, let’s move to Signal. Then what happened, Danny?
Danny Vena: A totally unrelated company, Signal Advance, their over-the-counter stock from $7 to $70 in one day.
Jason Hall: Few days before that, it went from $0.25 a share to $7, then to $37.
Danny Vena: Crazy.
Auri Hughes: It wasn’t in my finance textbooks, so I don’t know what you call that. [laughs]
Jason Hall: That’s an inadvertent pump. That’s what you call that.