6 Times Internet Rumors Caused the Stock Market To Plummet
Written by
Jacob Wade
Edited by
Zuri Anderson
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Stock prices can rise and fall with news, and with the unfiltered world of the internet at everyone’s fingertips, news travels faster than ever.
This can be great news for traders and investors looking to profit from rising prices, but this can also hurt investors when bad news breaks. And with the massive influence of media companies and CEOs being able to post their thoughts instantly online, this can come with devastating effects.
Here’s a few examples of internet rumors causing the stock market to drop suddenly. And yes, many of them are because Elon Musk tweeted something.
Associated Press Twitter Hack
The Twitter account for Associated Press was hacked in April of 2013, announcing an explosion at White House injuring President Obama in the process. Within minutes the White House Twitter account posted the President was fine, and the Associated Press quickly announced their Twitter account was hacked.
The Dow dropped nearly 140 points instantly, but recovered within minutes of the White House poste stating the President was fine.
Fake AI-Generated Image of Pentagon Explosion
In May of 2023, a fake AI-generated image of black smoke billowing out of the Pentagon building was circulated online and by some media outlets, causing the stock market to drop temporarily. The S&P 500 dropped 0.3% within minutes of the news breaking, but recovered after it was debunked as a fake image.
Elon Musk ‘Not’ Buying Twitter
In April of 2022, Musk announced he was going to purchase social media platform Twitter. But less than a month later, Musk seemingly paused the deal in a post that read, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
Twitter stock dropped 18% during pre-market trading that day. Then, in July of 2022, he seemingly called the deal off completely in a letter to the SEC trying to back out of the deal due to misleading information. Again, the stock dropped when the news broke.
Elon Musk ‘Tesla Stock Price is Too High’
Musk casually posted on May 1, 2020 that “Tesla stock price is too high imo.” This caused shares of Tesla stock to sell off quickly and ended the day 10% lower than it began. But it recovered quickly and was up nearly 20% by the end of the month.
Elon Musk Hertz Tweet: ‘No Contract Has Been Signed’
Hertz announced in 2021 that they were fully embracing electric cars, and were going to place an order of 100,000 Teslas to add to their rental fleet. The stock price jumped quickly, but then a post by Musk pumped the brakes on the price action.
Musk’s post in response to an investor thanking him read: “If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet.”
While Tesla stock took a small 4% loss for the day, Hertz fared far worse. Over the next few weeks, Hertz stock price dropped over 30%.
Elon Musk: ‘Yes, We Are Talking to Airlines About Installing Starlink’
Musk mentioned being in talks with airlines about adding Starlink as an internet service provider in the sky. Airline internet provider Gogo was impacted by this post, with their stock dropping nearly 5% during trading that day.
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