by Ajay Shah and Atibhi Sharma.
The main paradigm in finance is the efficient market hypothesis which suggests that as soon as there is new information, the news is rapidly incorporated in the price. Markets are generally quite efficient, it's hard to find opportunities for supernormal returns.
But there are chinks in the armour. There are clear examples, worldwide, where market prices have been clearly wrong.
In this article, we show a recent Indian story which should be added into the Mistakes of Markets catalog. The share price of Parle Industries soared following the video of Italian prime minister Giorgio Meloni receiving a packet of Parle Products' Melody, gifted by Indian prime minister Narendra Modi. Parle Products, the maker of Melody, is an unlisted private entity. We also show some interesting global examples and offer some thoughts on understanding finance.
The "Signal" Ticker Confusion (2021)
In January 2021, after WhatsApp changed its privacy policy, Elon Musk tweeted 'Use Signal', referring to the free, open-source, and heavily encrypted messaging app. This pushed noise traders to purchase shares of Signal Advance (SIGL). The actual Signal app is managed by the non-profit Signal Foundation and is not publicly traded. Signal Advance, on the other hand, is a tiny medical detection devices manufacturer in Texas.
SIGL was an illiquid penny stock. It surged from $0.60 to $70.85 within three days - an 11,700% surge within three days. It took the markets six to nine months to return to pre-tweet levels.
Clubhouse Media Group (2021)
In the same month, on January 31, 2021, Elon Musk tweeted that he would be joining a room on Clubhouse, the then-viral invite-only audio chat application. The next day, shares of Clubhouse Media Group (CMGR), a penny stock entirely unrelated to the privately held Clubhouse app, surged. CMGR had recently rebranded itself as a marketing agency from a healthcare firm. The stock opened at \$10.85 on February 1, 2021, up from \$1.50 - \$2.00 from the previous days. It reached an all-time high of \$28.43 on February 15, 2021 (a near 1,400\% increase from its pre-tweet baseline) and it took roughly four months to return to its pre-tweet level.
Zoom Video vs Zoom Technologies (2019-2020)
When Zoom Video Communications (ZM) filed for its IPO in 2019, investors rushed to buy shares, accidentally purchasing the shares of a defunct mobile phone parts manufacturer called Zoom Technologies (Ticker symbol: ZOOM), a penny stock trading at \$0.005. The stock surged 54,000\% to around \$5. This confusion was not a one-off incident, as a similar trend was observed during the lockdown in the pandemic of 2020 when ZOOM went up 1,800\% to \$20.90 until the US Securities and Exchange Commission physically intervened, suspending trading for Zoom Technologies for 10 business days and forced a ticker symbol change to ZTNO.
Bombay Oxygen Investments (April 2021)
During the second wave of COVID-19, when there was a shortage of medical oxygen in India, noise traders started looking for oxygen in the market. They landed on Bombay Oxygen Investments, a Non-Banking Financial Company that had exited the oxygen manufacturing business in August 2019 and had received RBI's registration certificate on December 31, 2019 for the same. The stock surged 131.3% in under 12 trading sessions, rising from Rs 11,025 on March 31 to Rs 25,500 intraday on April 20 and then, fell by ~ 50% to 12,700 in August of the same year.
L. G. Balakrishnan (2025)
In 2024, shares of LG Balakrishnan & Bros (a manufacturer of automotive chains) surged to a 52-week high because noise traders mistook it for the upcoming IPO of the consumer electronics giant LG Electronics India. The mispricing lasted only a day as investors realised their mistake.
Pan-Homophonic Events
Zhang et al. (2026) documented a new phenomenon of pan-homophonic events, where confusion between linguistics, trending keywords and stock names triggers sudden market volatility, specifically for a Chinese technology firm named Chuan-da-zhi-sheng. Since "Chuan-pu" is a loose and phonetic translation of Trump in Mandarin, noise traders phonetically interpreted the company's name to mean "Trump wins big". This unrelated traffic software stock essentially became a trading proxy for US political events. In 2016, when Donald Trump won the US presidential election, shares of the company surged 7.6% in a single day and then again in 2024, following major turning points in the US election cycle, the same stock repeatedly hit its maximum 10% daily upper circuit limit.
Ticker Confusion and the Limits of Arbitrage
Balashov and Nikiforov (2019) documented the systematic nature of these mix-ups. Investigating 254 pairs of stocks, they found that erroneous trades account for roughly 5% of all trading turnover in the smaller "shadow" companies. A classic example is Ford Motor Company (Ticker: F). Investors systematically assume its ticker is 'FORD' - which is actually the trading symbol for Forward Industries, a micro-cap manufacturer of carrying cases for medical devices. Similarly, a paper by Rashes (2001) studied the mass confusion between MCI Communications and a completely unrelated fund with the ticker MCIC. They found that while the co-movement between the two similarly-named stocks is statistically significant, it is not something that arbitrageurs can easily exploit because shorting an illiquid shadow company is costly.
Parle Industries
The Parle Industries episode is the latest entry in this ledger. Parle Industries is not a confectionary giant; it is a micro-cap company involved in infrastructure development, real estate, and paper waste recycling. Prior to the viral Modi-Meloni video, its market capitalization hovered around Rs.360 million, the price of a few apartments in Bombay. It was a penny stock with a share price of about Rs.5 and an average trading volume of 20,000 to 60,000 shares daily in the 6 months prior window.
- 9:30 AM (IST) - The Baseline: Market opened in India. Parle Industries opened at INR 4.95.
- 10:00 AM (IST) - The Event: Italian Prime Minister Giorgia Meloni uploaded a video to her official Instagram account and then her X account with the caption, "Thank you for the gift."
- 10:00 AM to 3:35 PM (IST) - Amplification: The video went viral. On X, the hashtag #Melodi trended, and the reel became the most viewed reel on PM Meloni's Instagram account. Simultaneously, Google Trends intraday data showed a spike: searches for "Parle share" and "Melody".
- 3:30 PM (IST) - Noise trading: By the market close, Parle Industries was locked into a 5% upper circuit closing at INR 5.25. It closed at a volume of 857,248 shares.
The stock hit the upper circuit for five consecutive trading sessions. BSE historical data shows that from May 21 through the end of the month, the stock's delivery percentage reached exactly 100%. The noise traders were taking delivery, believing it was worth holding this for multi day horizons.
Market Efficiency and the Role of Liquidity
These are examples of how prices can go wrong, exposing failures in market efficiency.
A better interpretation of market efficiency comes from focus on how clever people could exploit the mistakes of the noise traders. Here, we see the problems of financial market completeness (can you take an opposing trade?) and financial market liquidity (is the size of your winning trade big enough to matter?). A market inefficiency that is not exploitable will not be readily solved by the market. With small cap penny stocks there are no single stock derivatives that rational traders can short. In India, stock lending does not work so it is not possible to short sell and profit from the mistakes in the price. To the extent that better financial economic policy increases liquidity, it will, in turn, increase access to the correct tools for trading (single stock derivatives and stock lending). As a result, these problems will be diminished.
These problems are a reminder of the difficulties of small capitalisation stocks. Financial market trading works extremely well for large firms. We may perhaps apply a thumb rule in India of a minimum point of a market capitalisation of Rs.10 billion. But we do wrong to assume it is equally useful and equally effective for small firms. There is a certain social justice instinct in India, where we like to bring the glory of stock market listing to small firms, thinking that we are giving a helping hand to a weak firm. We need to be more cautious in the usefulness of this approach.
Financial markets are a remarkable information processing system. It is easy to disrespect the drama that is ceaselessly afoot. What is going on is that millions of clever people have been harnessed to constantly look at the world and make prices. These prices are the commanding heights of the economy and shape the resource allocation. Markets are not perfect, they are the best aggregation of what humans can figure out based on their self-interest.
Bibliography
Parle Industries' upper circuit to Signal's 5,100% surge: 5 mistaken stocks that triggered market frenzy, Surabhi Pandey, Moneycontrol, 20 May 2026.
#Melodi trends on X as PM Modi gifts Melody toffees to Italian PM Giorgia Meloni, DH Online, Deccan Herald, 20 May 2026.
190 Million And Counting: Meloni's Melody Moment With PM Modi Is Mega Viral, Abhinav Singh, NDTV, 21 May 2026.
Publicly Listed Zoom Video Communications: Traders Buying Zoom Technologies, Jonathan Garber, Markets Insider, 18 April 2019.
Want to Invest in the Zoom IPO? Make Sure You Buy ZM, Not ZOOM, Minda Zetlin, Inc.com, 18 April 2019.
Traders mistakenly invest in Clubhouse Media Group after Elon Musk tweets about a separate, private app with the same name, Natasha Dailey, Business Insider, 2 February 2021.
COVID-19: Bombay Oxygen shares up 256%; it doesn't even make oxygen, Business Today, 20 April 2021.
Massively Confused Investors Making Conspicuously Ignorant Choices (MCI-MCIC), Michael S. Rashes, The Journal of Finance, Vol. 56, No. 5, 2001.
How much do investors trade because of name/ticker confusion? Vadim S. Balashov and Andrei Nikiforov, Journal of Financial Markets, Vol. 46, 2019.
Quantifying the Linguistic Complexity of Pan-Homophonic Events in Stock Market Volatility Dynamics, Yunfan Zhang, Jingqian Tian, Yutong Zou, Xu Zhang, and Xiao Cai, Entropy vol. 28, no. 1, 12 January 2026.
Mistaken Identity: LG Balakrishnan Shares Surge as Investors Confuse It for LG Electronics India, Nishanth Vasudevan, Economic Times, 15 October 2025.
The authors are researchers at XKDR Forum. The authors would like to thank Susan Thomas, Amrita Agarwal, Aditi Mascarenhas and Jay Kulkarni for their valuable feedback and discussions on this piece.
