Elon Musk, the world’s richest man, was on the US stock market on Monday.
Elon Musk, the world’s richest man, was on the US stock market on Monday.
By revealing that he bought a part of Twitter Inc., Elon Musk triggered the biggest rally in shares of the social networking platform since its initial launch in 2013, with nearly every Other growth stocks followed suit — and to boot, the Nasdaq 100 and the S&P 500 and the Russell 2000 as well.
“This is a guy who just poured a bunch of money back into the market,” said Michael O’Rourke, director of market strategy at Jonestrading.
Confidence is also boosted by Tesla Inc. Musk’s shares, the company’s stock jumped 5.6 percent after posting record first-quarter deliveries over the weekend, bolstering investor confidence that the company can weather a series of setbacks. try.
“The stories in the headlines were very positive and they were driven by Musk and I think it helped open up the growth space,” O’Rourke said. “It has investors licking their wounds feeling a little better.”
The tech-focused Nasdaq 100 stock index was up 2%, while an exchange-traded fund that tracks the social media sector was up more than 5%. Among the big gainers is Meta Platforms Inc. Facebook’s parent company with a 4% increase, and Snapchat parent Snap Inc. increased by 5.2%. Pinterest Inc. up 10% and Twitter closed 27% higher at $49.97.
Musk took a 9.2 percent stake in Twitter to become the platform’s largest shareholder, a week after hinting he could shake up the social media industry. The stake is worth about $2.89 billion, based on Friday’s market close.
“For a stock that is significantly undervalued, it’s a Cinderella story for the bulls that Musk has made,” said Dan Ives, managing director and senior equity analyst at WedBush Securities. join Twitter.
“Whether it’s Musk or another strategic contractor, this can really shake up the social media world. Musk won’t just hold 9% shares passively and go home,” he said.
Cathie Wood’s ARK Innovation Fund highlighted the risk-taking sentiment fanned by Musk on Monday. The fund invests in fast-growing companies like Block Inc. and Teladoc Health Inc. increased by 4.4%.
The best month
The moves contributed to a strong start for US stocks in April, the best month for the S&P 500 in 25 years.
Many hope that stocks will continue to rally this month even as US companies begin to report the damage done to profit margins from decades of high inflation. Since 1997, the S&P 500 has posted an average return of 2.5% in April, according to data compiled by Bloomberg.
However, not everyone shares Monday’s enthusiasm. US brokerage BTIG points out that cyclical stocks tied to the health of the US economy including banks, builders and transportation are struggling with the broader stock market. , raising questions about the durability of the latest rally.
