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Originally Posted by bizaro86
The Tesla one is interesting. Once they're added to the S&P 500 at the end of the month where is new money to the name coming from to keep it going up? Its unlikely operating profits will be the source.
I think the only chance at this point to grow into their valuation is issuing shares at their current very high valuation for accretive acquisitions. If they could buy a few big firms for stock and start getting some roll up benefits going that might keep the momentum.
The big short sellers (ie chaos recently) are throwing in the towel, so that source of demand for shares is also going to decline.
I bought a few very out of the money puts today, first TSLA short for me. A bit of play money is all.
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The equity raise is an interesting move. In theory at their valuation they could generate a lot of capital to make a bunch of big name acquisitions.
The addition to the S&P is really a positive feedback loop for them as all of these huge etf’s had no choice but to add them and it will just keep propping up the price up to December 21. After I expect a decline where I will cover the rest of my short and realize a decent sized loss.