Elon Musk's Tweets and the Stock Market

After his buyout of the social media company, Twitter, in April of 2022, Elon Musk has rebranded the platform to “X” as he hopes to create an application to serve all of the world’s digital needs, not just social media, as Twitter had. But, in order to evaluate the impact of some of Musk’s first tweets, we have to step back and take a look at his social media history from January 2021. Actually, at this point, Musk had not even posted anything on his Twitter account to change the markets! Musk simply changed his Twitter bio to “#bitcoin”, and brought up speculation that he bought a large sum of the up-and-coming cryptocurrency that was rapidly rising in popularity. As a result, the value of Bitcoin increased by more than 20%, to $38,566 the following Friday. Musk also boosted the stock price of the corporation “CD Projekt” which was responsible for creating the videogame “Cyberpunk 2077.” Musk did this by simply posting a picture of the interior of the brand-new Tesla Model S Plaid, followed by a post in the same thread stating that the center screen console of the vehicle “can play Cyberpunk.”

 

Musk also has coined some unique terms concerning the surge in the share price of Gamestop back in 2021. Musk simply tweeted “Gamestonk!!” followed by a link to the “WallStreetBets” group on Reddit. Musk’s clever follow-up tweet greatly further fueled the craze in the popularity of Gamestop stock prices. 

 

Despite his seemingly superhuman capabilities to sway the stock market with one-liners on Twitter, Musk’s influence on the market should be seen more as a fad, rather than a long-term standard. Musk largely attacks the market sector of “short” selling and purchasing, where traders are incentivized to buy or sell shares of stock as they see fit. Although it is interesting to observe the influence figures like Elon Musk have on the stock market, smart investors will know that fads are bound to die out, and they should carefully consider where they put their money.