Eli Lilly, the world’s leading producer of insulin, announced on Friday, “We are excited to announce insulin is free now.” The company’s stock immediately plummeted as investors saw the company’s cash cow disappearing. The problem was that it wasn’t Eli Lilly making the announcement. It was a fake account that used Elon Musk’s new “pay $8 and you can have a blue verified checkmark” to spoof the world.
Since taking over Twitter, Elon Musk has made massive changes. From firing the CEO and the content control team to changing how the business would make money, Musk has caused a lot of upheaval on one of the world’s leading social media platforms.
One of the biggest areas of contention has been the blue verification check mark that celebrities and corporations often have. Before Musk, the cost was a $4.99 per month subscription, and there was a verification process to prove who controlled the account.
Musk almost immediately told Twitter staff and users that the price would go to $19.99 per month. This started a backlash from many people who can afford it but found it offensive. Stephen King, author and prominent Twitter user made it clear with a few expletives that he would leave rather than pay $19.99. He noted that Twitter should pay him, as some people go on Twitter to hear from their favorite authors, actors, and other celebrities. Musk replied to King, "How about $8?" seemingly negotiating with the author.
The blue check verified program is now $8 instead of $4.99, but it’s causing issues.
Someone created a bogus Eli Lilly account, paid the $8 for a verified blue check mark, and announced that insulin would be free. The stock market immediately responded, and people started selling the stock, thinking Eli Lilly had lost its collective mind.
Lilly replied a short time later that it was a bogus account and insulin was not free, but the damage was already done. Lilly stock dropped $22 in an hour and a half. It ended the day down $16.08 simply because of this news from a fake Twitter account.
For Eli Lilly stockholders, this might mean the loss of billions of dollars simply because of the drop in value of the stock, but it means even more for the broader market.
The first thing that observers note is that the market can be manipulated by social media. The website Reddit hit the news last year when a group of Reddit users started to buy GameStop stock, driving the price sky high, only to sell it and make a lot of money. This type of cross-border, anonymous, online manipulation is profoundly easy since users can communicate in public, as on Reddit, and privately through encrypted platforms like Telegram and others.
Also noted is the idea that the stock market, far from being the coldly logical financial barometer most people consider it to be, is driven by emotion, particularly fear.
Witness the latest falls in the market due to interest rate increases by the Federal Reserve. Those increases were expected months in advance, but the stock market reacted as if it were all a surprise.
Most economists also note that Fed increases are necessary to slow the economy and inflation. So the interest increases are a good thing, but the stock market reacts as if it's a terrible mistake, simply because it might affect company profits and their share dividends.
The market also looks at what most Americans consider good news as bad. Nearly every time there's a strong employment market report, lots of jobs available, and wages going up, the market takes a hit. That's because investors don't think about the country as a whole but only concern themselves with company profits.
Many politicians point to the stock market when touting their successes or highlighting their opponent's failures. Based on the volatility caused by a 9-word tweet from a fake account set up only moments before, the stock market is proving to be a reliable barometer of the real economy in the country.
Bob Peryea
National Correspondent
The Kentucky Daily