Krystal Hu

NEW YORK (Reuters), Kyle Ash purchased 2,000 pounds of worth $2,615. Twitter Inc (NYSE) stock shares immediately after he learned Elon Musk had been named the company’s biggest shareholder.

After shares rose 27% following Musk’s announcement, the stock price of Twitter jumped 27% Monday by a Reading-based retail worker.

On average Ash paid $49 for each share, which is lower than the $44 target price from Twitter stock analysts. Wall Street has become a magnet for bullish speculations, and many individuals have taken advantage of this trend to trade stock options.

Ash also has investments in meme stocks, such as the video retailer GameStop Corp (NYSE) and AMC Entertainment (NYSE) Holdings) stated that he hoped the celebrity billionaire Musk would create the same excitement for Twitter stock. Elon Musk’s influence creates waves in the beginning. Ash stated that he has faith in the faith of others.

After Musk disclosed that he owned 9.2% of Twitter, millions of investors flock to the stock. This made it the U.S.’s most-purchased stock on Monday according to Vanda Research (NASDAQ:). On Monday, the inflow of $152 million to the stock was the highest among all stocks or ETFs listed on U.S. Exchanges.

Musk is a well-known investor who has stayed loyal to his company Tesla Inc (NASDAQ:) Inc over the last ten years, while Tesla was trying to improve production and make electric cars more affordable.

Tesla has a market capitalization greater than $1 trillion and is currently one of the top-valued companies worldwide.

Musk is behind many ventures, including rocket maker SpaceX. Forbes rates him the richest man in the world with $290 billion.

People familiar with the matter stated that Musk’s appeal to retail investors is one reason Twitter offered him a place on its board.

Musk and Twitter didn’t respond to our requests for comment.

In the push by Twitter to boost its advertising and increase revenue with subscription products, shares of Twitter have fallen behind peer stocks. In the twelve months prior to Musk’s announcement, Twitter stock fell 38%.

Vanda reports that 9.9% is made up of retail investors by Twitter. This figure may be higher than Tesla where retail investors make up 1.5% of Twitter’s investor base, but it’s still lower than AMC which is home to 40.9%.

Bank of America Securities Analyst Justin Post stated this week in a research paper that Musk’s followers on social media will drive substantial retail investor interest and activity in the stock. The hype can also draw investors who are interested in shorting stocks, said Post.

GAMESTOP, AMC PLAYBOOK

Musk invests in Twitter using a strategy similar to AMC or GameStop’s. They have used the popularity of their leaders with retail investors as a way for them to bet on other companies.

AMC made a $27.9 Million investment in Hycroft Mining Holding Corp. The company is a struggling gold and silver miner. Retail investors followed suit, and Hycroft shares now trade at seven times their value a month earlier.

An investment by GameStop Chairman Ryan Cohen in retailer Bed Bath & Beyond (NASDAQ:) last month led to a doubling in that company’s market value.

Analysts warned that Twitter’s hype-driven stock surge may not be sufficient to maintain the interest of retail investors.

Angelo Zino, CFRA Research analyst wrote this week that Musk’s future contribution to Twitter depends on his ability to make it more profitable.

Zino stated that Musk’s recent criticism of Facebook was a sign that he is trying to make the platform more profitable.