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Tesla 5-1 Stock Split

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Re: Tesla 5-1 Stock Split

#81

Post by benmller313 »

wilg wrote: post #75
riffraff wrote: post #71

Earlier quoted context omitted.

WebVan[0] and Pets.com[1], two of the most well known busts of the dot-com era, did not use ads. Ad-based-internet became a big thing many years later, I believe. (I do agree that TSLA is different, anyway.) [0] https://en.wikipedia.org/wiki/Webvan [1] https://en.wikipedia.org/wiki/Pets.com

Strange that you would say Pets.com didn't use ads given in your link there is a section about their famous sock puppet mascot with the following quote: > Pets.com hired the San Francisco office of TBWA\Chiat\Day to design its advertising campaign. Also here's a collection of Pets.com TV ads: https://www.youtube.com/watch?v=sICSyC9u5iI And Webvan did ads too: https://www.bizjournals.com/sacramento/stories/2001/03/05/…

I think you misunderstood, the point was that pets.com's revenue model wasn't based on free services supported by advertising sales.

Re: Tesla 5-1 Stock Split

#82

Post by esrauch »

rich_sasha wrote: post #19
Xcelerate wrote: post #2

I don’t really understand stock splits. Is the only point to allow people to buy shares who could previously not buy because one share was too expensive? If so, why not just introduce fractional shares into the stock market with some fixed point number of decimal places? Or just keep track of ownership fraction (e.g. 0.0043% of the company)?

There are weird incentives for this. In US the tick size for any stock is always $0.01. So a stock with a price of say $1 has a minimum bid ask spread of 1%, which is a lot. On the contrary, if one share is too expensive, it limits liquidity in a stock. This is usually bad, though Berkshire Hathaway voting shares are deliberately kept expensive to stave off speculators. This then get meta-player. A split suggests the…

It seems very strange; can a share not be worth less than 1 cent, or can it for ask but not bid?

Re: Tesla 5-1 Stock Split

#83

Post by jodrellblank »

sfblah wrote: post #25
teruakohatu wrote: post #21

Earlier quoted context omitted.

> I don't want to debate it Kind of sounds like you do want to debate it. I have no idea if it is or is it a it overvalued but plenty of people do share you view, and they lost a lot of money betting against Musk.

No I really, really, really don't want to debate it. I'm not kidding. And I have no position either way and never will. I'm just an observer.

DAE not watch TV?? It's like I can't even talk about not watching TV without someone telling me they watch it. It's literally persecution or something, I don't even want to talk about it! I just mention it everywhere people are talking about Tesla, I mean TV, just because I should be allowed to (which I totally am allowed but don't tell anyone) but also don't want anyone to respond because I "don't want to talk about it" (as I keep saying while talking about it, nudge nudge wink wink). If you agree with me (which tons of people will even though I pretend they won't (c.f. "the best way to get a fix on Linux is to state something is impossible")) then I get upvotes and win, and if you engage with me when I taunted you not to, I win.

Re: Tesla 5-1 Stock Split

#84

Post by basch »

GuB-42 wrote: post #79
sfblah wrote: post #12

Does anybody else share my sort of shell-shock WRT Tesla? I'm one of those who thinks its stock (and probably all the big tech names) are in a bubble. But whenever I say that I get shouted down, downvoted, told I'm an idiot, etc. I'm hoping this comment is vanilla enough to be safe... just curious if others have had the same experience. To be clear: I'm not interested in debating the value of Tesla. I'm curious if ot…

I don't think that Tesla is a bubble, more like gambling. Tesla right now clearly isn't worth $1T, but it is definitely on something big. Electric cars look well set to be the future, and so are the batteries that go with them. And currently, Tesla is a leader in both these fields. Furthermore, Tesla is creating an ecosystem not unlike Apple with its cars, it includes their supercharger network and all their software…

It is worth $1T in the sense that people have said "this team looks like the best team to give $1T to to build cars."

Sure, everyone is investing to make money and extract it later, but its also a bet that they will be a player for a while, are more efficient at using the cash then their competitors, can scale better. At the end of the day it is capital allocation, and the market has decided this team is the best team to handle the task. (Or it is a true bubble, where everybody doesnt want to miss out, but I think its some of the former too. Ford and GM are legacy businesses that have legacy overhead.)

Re: Tesla 5-1 Stock Split

#85

Post by ogre_codes »

njarboe wrote: post #77
ogre_codes wrote: post #65

Earlier quoted context omitted.

Apple is in the DOW and the DOW is a stupidly weighted index where share price affects what percentage of the index that company holds. Right now a 1% increase in Apple pushes the DOW up 10 times more than a 1% increase in Cocoa Cola. Companies in the DOW tend to have share prices below $500/ share and most are under $200 and the DOW won't add companies with high stock values as a result (Apple was added only after t…

Very few people invest in the basket of companies that make up the Dow Jones. Its use as an index of how the stock market is behaving is really a historical artifact at this point. One ETF in the top one hundred [1] ETFs is based on the Dow Jones Industrial Average and that one is ranked 43rd. Joining the S&P 500 is a big deal, on the other hand, as the three biggest ETFs are S&P 500 funds. [1] https://etfdb.com/comp…

Fair enough. Even so, I think inclusion/ exclusion in the DOW is far more likely to affect Apple's choice to split or not than making the stock more accessible to investors.

Re: Tesla 5-1 Stock Split

#86

Post by bb88 »

pinky1417 wrote: post #78
tejohnso wrote: post #36

Earlier quoted context omitted.

You're not alone. I wouldn't buy it at these levels (or even close to), but I wouldn't short it either. (paraphrasing C.Munger)

I appreciate seeing Charlie Munger show up on HN. He may not be a technophile but his business and life principals are applicable everywhere. I share Munger's opinion, not just on Tesla. I don't short companies because, as John Maynard Keynes said, “the markets can remain irrational longer than you can remain solvent.” And if I were to short companies, I'd be more likely to choose a Kodak anyway because at least Tesl…

>...as John Maynard Keynes said, “the markets can remain irrational longer than you can remain solvent.”

That really explains a lot with what's going on in the current economy.

Re: Tesla 5-1 Stock Split

#87

Post by woodandsteel »

est31 wrote: post #68
nine_k wrote: post #58

Earlier quoted context omitted.

Buy gold ;) I wonder why TSLA is compared to dot-com stocks. Tesla produce real, tangible things, with sale and resale value; same applies to their factories. They are in the "real sector", while dot-coms were (and are) in the "virtual" services sector propped by ad revenue. TSLA can be a bubble, but it must be a different kind of it.

Tesla produces real things, yes, any they have already driven change in the car industry. But even if Tesla displaces all other carmakers, which isn't likely, there is a total limit to the car market. Another reason to tell why Tesla's stock is in bubbly conditions is the timing. Why is it soaring up right now? Is there some event that makes it more likely that people buy cars? No. The current events actually point t…

I have no idea whether or not Tesla's stock is over-priced. However, it is definitely more than an auto company. It has a solar division, and it make electricity storage systems for home and utilities. Also, there are strong indications it is about to go into manufacturing li-ion cells. It seems to me it is quite possible that at some point it will be worth a trillion.

Let me add it is interesting that people who say Tesla is over-valued so often make this mistake, even though most of what I said is widely known. Perhaps people are being intentionally misleading.

Re: Tesla 5-1 Stock Split

#88

Post by betterunix2 »

ogre_codes wrote: post #85
njarboe wrote: post #77

Earlier quoted context omitted.

Very few people invest in the basket of companies that make up the Dow Jones. Its use as an index of how the stock market is behaving is really a historical artifact at this point. One ETF in the top one hundred [1] ETFs is based on the Dow Jones Industrial Average and that one is ranked 43rd. Joining the S&P 500 is a big deal, on the other hand, as the three biggest ETFs are S&P 500 funds. [1] https://etfdb.com/comp…

Fair enough. Even so, I think inclusion/ exclusion in the DOW is far more likely to affect Apple's choice to split or not than making the stock more accessible to investors.

I doubt it, and I think there is a misunderstanding about the investors Apple referred to in their public statement on the split. As a company's share price rises the stock becomes less liquid, because trades happen in smaller quantities; Berkshire Hathaway's class A shares are probably the most extreme example. Low liquidity is a problem for mutual funds, which have to sell assets whenever an investors sells their shares in the fund (which may be a relatively small sale e.g. a retirement account distribution), because low liquidity makes asset sales more difficult. In general institutional investors will have liquidity rules that constrain the assets their funds can hold to avoid that kind of problem.

Given how much investment capital is held by institutional investors, companies have a good reason to split their shares if the share price is too high. Berkshire Hathaway created a new share class to support the needs of institutional investors, and I would read "accessible to investors" as "conforming to the liquidity requirements of institutional investors."

Re: Tesla 5-1 Stock Split

#89

Post by ac29 »

nine_k wrote: post #58
webXL wrote: post #49

Earlier quoted context omitted.

So there is an alternative?

Buy gold ;) I wonder why TSLA is compared to dot-com stocks. Tesla produce real, tangible things, with sale and resale value; same applies to their factories. They are in the "real sector", while dot-coms were (and are) in the "virtual" services sector propped by ad revenue. TSLA can be a bubble, but it must be a different kind of it.

Just because Tesla welds together their primary products doesnt make them any more "real" than the products of Microsoft, Netflix, or Google. Sure, you can't melt down a season of a Netflix TV show and sell it as scrap, but Tesla's value is almost entirely in their IP as well.

Re: Tesla 5-1 Stock Split

#90

Post by dexterdog »

o-__-o wrote: post #18
sfblah wrote: post #12

Does anybody else share my sort of shell-shock WRT Tesla? I'm one of those who thinks its stock (and probably all the big tech names) are in a bubble. But whenever I say that I get shouted down, downvoted, told I'm an idiot, etc. I'm hoping this comment is vanilla enough to be safe... just curious if others have had the same experience. To be clear: I'm not interested in debating the value of Tesla. I'm curious if ot…

If they can successfully enable fully automated self driving cars, then I think the value is entirely justified. See FaceBook. Disclaimer: I bought Tesla calls today and now assume I’m rich so your opinion may differ

If they can pull that off and patent it and get a cut of everybody else doing it or block them from doing it at all then the price is justified. Otherwise they'll just be some tiny volume auto maker.
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