The public reaction to Elon Musk’s tweets is quite immediate and explosive. The financial market reacts aggressively even to his speculations and the topic of his tweets trend almost instantly. While this bodes well for brand/app promotions, it can also backfire because of how large-scale the ‘Elon Effect’ is.
In a recent snafu, investors purchased the wrong stock assuming it represented the app that Musk was busy promoting on his Twitter. Of course, this mistake was rectified, but it’s interesting to note that this wasn’t the first time this kind of incident occurred. Here’s what happened.
The confusion regarding Clubhouse stock
As in the case of Signal, the messaging app that inadvertently drove up the cost of the Signal Advance stocks thanks to Musk’s ‘Use Signal’ tweet, a similar faux pas happened with Clubhouse. Traders and investors assumed that the CMGR ticker belonged to the Clubhouse app and dove in like they did with a medical-device company, Signal Advance.
In the hopes of capitalizing on Musk’s tweet, investors aggressively purchased stocks that represented Clubhouse Media Group which is completely unrelated to the app. CMGR stocks soared to a high of $17.99 per stock, witnessing a 116% rise in its stock price.
What is the Clubhouse Media Group?
According to CNBC, Clubhouse Media Group, also formerly known as Tongji Healthcare Group. Inc owns a collection of mansions in Southern California to host social media stars. CMG also owns subsidiaries like the talent management company, Doiyen as well as the Brand Incubator and Pre-Seed Fund, WOH Brands.
This company is absolutely in no way related to the Clubhouse app that Elon Musk has been tweeting about. Its ticker CMGR is also completely unrelated to the Clubhouse app on the stock market.
Of course, once investors realized their mistake, the price of the stock went down.
Is Clubhouse app on the stock market?
Please note that as of now, there is no direct representation for the Clubhouse app on the stock market. Investors who are hoping to capitalize off of the app are eyeing/purchasing stocks in Agora, which provides crucial platform services to the Clubhouse app.
We hope this article clarifies any confusion you might have regarding Clubhouse Media Group stock. Take care and stay safe!