How ironic. A car company with its roots in deepest darkest communism, founded during the austerity of a national character which is associated with the antithesis of humor, makes a viral joke.
Perhaps even more ironic is that the subject of said joke was a play on words relating to a faux rebranding toward the theme of electric vehicle production, from a company whose technology is so outmoded that it had to resort to cheating the emissions measurements for compliance with North America's strict rules, causing its Diesel engined cars to be the subject of one of the largest lawsuits in automotive history.
A company that cheats its customers, produces dirty, polluting vehicles and has the odious "People's Car" as its founding cornerstone has succeeded in raising a smile to the motoring public's collective face by alluding to a new name incorporating a quip that would make Thomas Edison look down with a smirk.
The car manufacturer is Volkswagen, the world's second largest automobile company, whose ordinarily stoic and straight-laced corporate countenance turned up at the edges for once on April 1 this year.
Some bright sparks (get it!?) at Volkswagen decided to make an April Fool's Day quip by launching branding across the internet that inferred that the company had assumed a new name reflecting the current trend toward electric cars.
The internet became awash with commercial advertising and corporate website logos displaying Volkswagen's name as 'Voltswagen'.
The joke was very much agreed by the upper echelons of senior management at Volkswagen. “We have said, from the beginning of our shift to an electric future, that we will build EVs for the millions, not just millionaires,” said Scott Keogh, CEO of Voltswagen of America. "This name change signifies a nod to our past as the peoples’ car and our firm belief that our future in being the peoples' electric car."
Yes, all very drole. That is, until the marketing department failed to remove the joke before it was widely picked up by the media and taken as factual. "We didn't mean to mislead anyone" said a spokesman for Volkswagen, a company which still sits in the shadow of its huge 'Dieselgate' scandal which centered on it misleading the government and customers over emissions on diesel engined cars.
Oh I see, its a joke. What? Sorry? I can't hear you for the tractor-like rattling noise or see you through the thick black smoke. Cough...
What has this joke gone awry got to do with the markets, you may ask.
Well, the whole thing ended up across media channels and in discussions on social media, resulting in Volkswagen stock price popping 5% on the news. "The joke's on you investors!" quipped one equities, FX and commodities trader this morning.
The leak to the media giving the impression that the name change was genuine rather than a prank was so convincing that it had many many analysts and investors, and many news outlets, including The Driven, taken in until Volkswagen admitted the joke on Wednesday last week.
Of great interest was the investor reaction to the spring time prank, which has illustratated the level of interest in electrification of the auto industry, and the role that Volkswagen wants to play in it.
The investors are laughing all the way to the bank
Even Morgan Stanley, one of the world's largest FX interbank dealers by market share sent an email to investors on the subject saying “Auto investors are probably quite familiar with the story of how a VW marketing spoof pretending to change the company’s name to ‘Voltswagen’ was released too early and without much explanation, prompting investors to assume it was a legit corporate re-branding to emphasize VW’s commitment to electrification.
“What’s interesting to me is that, at least based on my discussions, investors really bought it. Hook, line and sinker.
“And the stock market clearly seemed to like it with VW shares up around 5% after the false announcement. It’s an interesting commentary on the state of the industry that such a communication, which VW admitted was meant to be a joke, was taken so seriously" said the Morgan Stanley representative.
This is a trend that is absolutely worthy of note these days.
Since the beginning of electronic trading and the accessibility to global markets by retail traders, equities, stock and FX brokers were masters of their own destiny, and it was down to the shrewd analytical skills, reliance on get-in-quick automated algorithms and astute studying of the news as to whether profitable headway could be created.
Nowadays, the power of social media and forum discussion has turned all of that on its head. Look back at the Meme stock debacle in January this year, where a Reddit subgroup influenced the movement of Gamestop stock so greatly that it caused several brokerages to halt trading, and in one case of a large, publicly listed British retail FX and CFD firm, severe platform outages.
We live in an age of people power - or perhaps we should call it Volkspower - in which all eyes are on how the masses perceive certain moves. This is the genuine age of media driven market movements.