Tesla CEO Elon Musk is the richest person on the planet, but he’s apparently still happy to shop on handmade craft site Etsy (ETSY). And in a sign of just how much influence Musk has on social media, shares of Etsy (ETSY) soared nearly 10% in premarket trading Tuesday just because he said he’s a fan.
“I kinda love Etsy,” Musk tweeted, adding in a follow up tweet that he bought a wool Marvin the Martian helmet (the alien from the Bugs Bunny cartoons) for his dog – fitting as Musk, of course, wants to one day go to Mars with his other company, SpaceX.
The stock pulled back later in the day though. It opened 8% higher but was down 2% by afternoon.
Still, given there was no other company news from Etsy Tuesday morning, it seems safe to say that Musk’s tweet was the primary catalyst for the stock’s premarket surge.
That, of course, is ridiculous. It’s also yet another example of the increasingly short-term nature of the stock market, one where algorithms can drive prices and individual investors using services like Robinhood are eager to make a quick buck.
Recently, shares of companies that many professional investors are shorting – because they expect the stocks to go down since the companies are struggling or overvalued – are instead surging thanks to support from traders on a popular Reddit board. GameStop (GME), BlackBerry (BB), Bed Bath & Beyond (BBBY), Macy’s (M) and AMC (AMC) are just a few examples.
But Etsy is nothing like these companies in that it’s thriving, in part due to strong demand for masks during the Covid-19 pandemic. Analysts are forecasting that Etsy’s sales nearly doubled in 2020 and that earnings per share soared more than 175%.
Musk’s tweet put a bigger spotlight on Etsy, though, and it isn’t the first time he’s sparked a big move in an asset that isn’t Tesla. The price of digital currency dogecoin popped late last month when he touted it on Twitter.
Still, it’s a bit ironic that Etsy is benefiting from Musk’s endorsement. Although Tesla was finally added to the S&P 500 in December, many on Wall Street were surprised when Tesla was snubbed for the index in September. The company that was added back then instead of Tesla? Etsy.