Thu. 18 Aug 2022, 2:00pm ET Benzinga Options, Sports, Top Stories, Markets, Media, General

Tesla, Inc (NASDAQ:TSLA) CEO Elon Musk, is undoubtedly aware of his influence on the stock and crypto markets.

Afterall, the richest person in the world caused shares of Tesla to surge almost 13% on Aug. 7, 2018, when he wrote the infamous tweet “Am considering taking Tesla private at $420. Funding secured,” which a U.S. district judge ruled in May was false and reckless.

The sometimes internet troll suggested on Tuesday he may purchase English Premier League team Manchester United (NYSE:MANU).

“Also, I’m buying Manchester United ur welcome,” he posted before later reneging by writing, “No, this is a long-running joke on Twitter. I’m not buying any sports teams.”

Whether truly a joke or whether the tweet was intentional, someone booked a massive profit on the positive reaction Manchester’s stock received following Musk’s tweet.

On Friday, two trading days prior to the tweet, unusual options activity appeared on Manchester. Here are the details. 

The Unusual MANU Options Activity: At 12:54 p.m. on Aug. 12, a trader executed a call sweep, at the ask, of 30,000 Manchester options with a strike price of $14 expiring on Sept. 16. The trade represented a $450,000 bullish bet for which the trader paid 15 cents per option contract.

Rumors began to circulate recently that the team may be for sale, which could account for the highly unusual interest in options that took place on Aug. 12.

What’s interesting is that Manchester sees very little options activity, and most of what does take place is with relatively small sums of money. The @unusual_whales Twitter account noted an increase of 3,500% in options activity that day.

The day following Musk’s tweet, Manchester surged almost 7% off Tuesday’s closing price. On Thursday, the stock was rallying an additional 2.5% higher over the $14 mark, putting the 30,000 calls purchased on Friday in-the-money.

The Backdrop: Musk's 2018 "funding secured" tweet enraged the U.S. Securities and Exchange Commission, which subpoenaed Tesla and sued Musk. Later, Musk and the SEC agreed to a settlement in which Musk would step down from his role as Tesla’s chairman, pay a $20-million fine and have people put in place to oversee his communications.

After the settlement, the drama between Musk and U.S. financial regulators appeared to ignite, with Musk taking to Twitter in October 2018 to refer to the SEC as the “Shortseller Enrichment Commission.” Earlier this year, Musk used some of his stage time at a TED conference to call the SEC’s San Fransisco regulators “bastards.”

See Also: Elon Musk Is Not Buying Manchester United But The Team Could Still Be For Sale

Musk's Tweets Move Stocks: Although Musk is no longer Tesla’s chairman and did pay the $20-million fine, it appears the billionaire remains completely unleashed to write whatever he feels like on Twitter. On more than one occasion, his endorsements of Dogecoin (CRYPTO: DOGE) on the micro-blogging platform have sent the crypto soaring.

But it doesn’t stop there. Musk’s Jan. 26, 2021 tweet in which he stated “I kinda love Etsy” sent the stock soaring to new all-time highs. On that same day, at the heights of GameStop’s (NYSE:GME) first big squeeze, Musk took to Twitter to write “GameStonk!!” The gaming retailer surged 37% in the after-hours session that day.

Even if the SEC hasn’t been on Musk’s case lately about his messages and statements, it would be hard to argue the founder of Tesla, SpaceX, PayPal, Inc (NASDAQ:PYPL), Hyperloop and the Boring Company, among others, isn’t aware of how his posts are able to influence the markets.

In January, 2021, an endorsement by Musk for encrypted messaging app Signal sent unrelated over-the-counter stock Signal Advance soaring 1,100%. More recent occurrences have taken place due to Musk’s tweets, which earlier this month sent cryptos Floki Inu (CRYPTO: FLOKI) and Dogelon Mars flying.

Photo via Shutterstock.