Elon Musk tweet sparks investment frenzy in wrong company called Signal

The SpaceX owner and Tesla CEO Elon Musk had investors scrambling to buy Signal shares, but it wasn’t company he was endorsing.

An obscure medical device company’s stock price surged more than 400 per cent after Elon Musk endorsed a messaging app with the same name – before crashing on Tuesday as the confusion was cleared up.

The bizarre rally started after the billionaire Tesla chief told his 42 million Twitter followers to “Use Signal” on Thursday, apparently referring to the mobile app that lets users exchange encrypted messages.

But investors instead bought up shares of Signal Advance Inc., a small, Texas-based outfit that makes devices used to detect various health problems.

The company’s stock, traded over the counter under the ticker symbol SIGL, spiked to $US3.76 ($A4.84) on the day of Musk’s tweet from 60 cents the day before. The shares nearly doubled to $US7.19 ($A9.25) on Friday and then skyrocketed 438 per cent to $US38.70 ($A48.73) on Monday despite news reports about the apparent ticker confusion.

But the stock plummeted as much as 67 per cent to $US12.75 ($A16.42) on Tuesday as Signal Advance issued a press release clarifying that it’s not associated with the Signal messaging platform.

“The entities have no relationship to each other and Mr Musk is not, to the best of our knowledge, a shareholder of SIGL,” Signal Advance CEO said in a statement. He also offered congratulations to the other Signal’s developers for their success.

Investors looking to buy stock in the Signal app are out of luck – it’s owned by the Signal Foundation, a roughly three-year-old non-profit.

The app has seen a boom of its own in recent days since rival WhatsApp issued an update to its privacy policy that allows it to share user data with Facebook, its parent company.

Some 810,000 users around the world installed Signal on Sunday, nearly 18 times the number seen on January 6, the day of WhatsApp’s privacy change, data from research firm AppTopia show.

Signal warned investors that it “has absolutely nothing to do” with Signal Advance’s stock as the latter firm’s share price exploded.

“It’s understandable that people want to invest in Signal’s record growth, but this isn’t us,” the app said on Twitter. “We’re an independent 501c3 and our only investment is in your privacy.”

This article originally appeared on the New York Post and was reproduced with permission