Musk Meme Traders Rush Back Into Tesla When the Stock Hits $420
(Bloomberg) — Crossing $420 gets Tesla Inc. investors excited.
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At least, that’s what data from Vanda Research show: The sum of five-day retail net buying picks up on average from $87 million to $135 million whenever the price moves above the cannabis-linked level, Vanda global macro strategist Viraj Patel said.
The number 420 allegedly first came to be associated with cannabis in the 1970s and, according to one account, marked the point in the afternoon when a group of California teens convened to get high. It’s since become a global signifier of smoking — and a favorite joke of Tesla CEO Elon Musk and the legion of investors who mobilize around him and share his adolescent bro brand of humor.
“I can’t believe I’m actually writing this, but it really comes down to the same two magic numbers, $420 and $69, that get the meme crowd going,” Roundhill Investments Chief Executive Officer Dave Mazza said. “Bitcoin’s push to $69,000 became a target in itself. GameStop traders latched onto round numbers as milestones to screenshot.”
On Tuesday, Tesla stock ended the session at $420.60. It had crossed that threshold, on the way up and down, several times over the past few years. But it was the first time its closing price has actually featured the number since going public 16 years ago.
X, the platform formerly known as Twitter — owned by Musk’s other public company, SpaceX — was alight with jokes and memes. One user bemoaned that shares didn’t close nine cents higher.
The chief strategist at Interactive Brokers, Steve Sosnick, said he’s surprised it took until now for Tesla to see a $420 close. “It’s been a Musk-related meme for years.”
And though it would be counterproductive for long investors to will a stock to perpetually remain at a certain price, regardless of what that price is, that hasn’t stopped $420 from recurring.
The latest push over it came along with a broader stock market rebound. By Wednesday afternoon, it had jumped to around $426 ahead of the carmaker’s second-quarter delivery report, which is expected Thursday.
“The technicals back it up, all the major moving averages reclaimed with momentum turning higher, so the meme number has strength behind it,” said Roundhill’s Mazza.
Still, Tesla retail flows were actually lower on Wednesday, so the 420 buzz hasn’t kicked in yet. But the five-day averages show investors snapped up more Tesla stock in nine out of 14 instances of the stock crossing above $420 since mid-2024, Vanda’s Patel said.
In 2018, Musk triggered a frenzy when he tweeted “Am considering taking Tesla private at $420. Funding secured.” He rounded the stock price from a valuation calculation to that number because he said his girlfriend would find it funny. Tesla stock shot up 11% following the comment, but when it became clear that there was no actual take-private effort in effect, the shares fell, resulting in a securities fraud suit from the SEC.
For better or for worse, $420 has been a longstanding part of the Tesla narrative, according to Karobaar Capital’s Haris Khurshid, and the stock officially closing there for the first time is just another chapter in the story.
“Tesla has one of the most engaged retail investor bases in the market, so numbers like that tend to take on a life of their own,” Khurshid said. “If enough people trade around a level it becomes real regardless of why it started.”
–With assistance from Felice Maranz.
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