Online Traders Plow Into Twitter With Bet on the Power of Musk
Elon Musk moves. An army of devoted traders listens.
Retail investors piled into Twitter Inc. stock on Thursday, after the world’s richest person and head of Tesla Inc. roiled the financial world with an audacious bid to purchase the company for $43 billion. Musk later expressed doubt about whether the blockbuster deal will succeed, but that didn’t do much to deter non-professional traders.
Twitter was the most-purchased stock on Fidelity’s list of buy and sell orders for Thursday, with its ticker trending on Reddit’s WallStreetBets and Stocktwits. The stock saw 12,000 buy orders compared with about 7,400 sell orders. Tesla was in second place, at 8,000 buys and 3,700 sells.
Retail traders had already fueled record Twitter trading volume on April 4, the day Musk reported his 9% stake in the company. As of the end of trading Wednesday, they had pushed $423.9 million into the stock since the disclosure.
“Retail will follow Elon to the gates of hell and back,” said Nick Colas, co-founder of DataTrek Research. “He’s made them a huge amount of money over the years.”
Institutional investors -- who would be the key to success for any Musk offer taken directly to shareholders -- reacted less favorably to the bid. Twitter’s stock fell 1.7% Thursday to $45.08, well below his $54.20 proposal.
But day traders and Musk fans have heightened interest in the billionaire’s movements, mostly because they’ve witnessed his influence before, and could potentially make Twitter into a so-called meme stock. Musk has a history of moving markets via the platform, where he has more than 80 million followers and is one of its biggest personalities.