(FT) – In the wake of Mr Elon Musk tweeting on Sunday that he would be talking live on the social media audio app currently taking the world by storm at 10pm that night, stocks in Clubhouse Media Group soared by more than 100 per cent in early trading on Monday, before easing back a bit to trade up a modest 83 per cent up on the day at pixel time.
Have a little look at the three-year chart:
The only problem is that . . . it’s the wrong Clubhouse. The Clubhouse that is currently mooning is in fact pink-sheet Clubhouse Media Group Inc, ticker $CMGR, which according to Bloomberg “provides medical treatment, scientific research, teaching, prevention, and healthcare services”.
So Clubhouse Media Group Inc is a healthcare company that used to be called Tongji Healthcare Group and which is based in Guangxi, China. Why is a Chinese healthcare company called Clubhouse Media Group?
Well according to a press release from the company, Tongji Healthcare in August acquired West of Hudson Group Inc, owner of “The Clubhouse,” “a collection of content creation houses located in the scenic mansions of Southern California that houses [sic] some of the most prominent and widely followed social media influencers, together carrying an estimated base in excess of 70 million followers across all the Clubhouse influencers”.
So there you have it. The company that doubled in value earlier on Monday is actually a company dealing in “content creation houses” (alas, yes, those really do exist) that is owned by what appears to be a shell company in China. It has no connection to the Clubhouse app launched in 2020, which is a private company that was valued at $100m last May after investment from Andreesen Horowitz.
We are open to the idea that there is still room for content-creation-house stocks to go up in value, but we didn’t see any news on Monday or over the weekend that would justify such a sudden share price reaction. We are therefore not entirely convinced that those who are currently piling into Clubhouse Media Group know what they are doing (unlike, of course, those who have been piling into GameStop, or bitcoin, or Tesla)./.