Forums

IT'S ABOUT THAT TIME TO INVEST IN MORE TSLA STOCK

IT'S ABOUT THAT TIME TO INVEST IN MORE TSLA STOCK

Title says it all

carlk | 03. April 2017

My advice to you is don't try to outsmart Elon. It's not fanboyism but chances that he did not see a challenge, and have a solution, that even you could see is from zero to none. Your "best" is simply not good enough. And glad you did not lose money but you did miss it when it's only 30. This fanboy did not.

Mike83 | 03. April 2017

More Powerpack installations. At this rate the Energy section will equal the auto section in a short period of time.

http://smartstocknews.com/61741-tesla-inc-tsla-to-deploy-another-50-mwh-...

donaldmeacham1 | 03. April 2017

Looks like the shorts are taking it in the shorts.

sentabo | 03. April 2017

Great time to be in TSLA, and a great time to be in a Tesla.

Bighorn | 03. April 2017

PRIVATE for Elon:

How about a 4:1 split so the new Model 3 owners get a lower price of entry?

carlk | 03. April 2017

It's coming "soon". FWIW my other two long term stocks NFLX and APPL both were split when stock price reached around 700 and both split 7 to 1.

carlk | 03. April 2017

Elon just tweeted "Stormy weather in Shortville ..." . No sympathy for those fools.

222 | 03. April 2017

hahaha.....
what's the line from Braveheart?

....hold......hold......hold.....HOLD!!!!!!

WattsThatGrin | 03. April 2017

When are we going to see 300? Happy I went in at 124 and again at 200.
I'm looooooooong...

acegreat1 | 03. April 2017

The way it's going, we can see 300 by 3:30pm eastern

carlk | 03. April 2017

Maybe short squeeze has already been started. With ~25 million shares shorted it will still be a few days to digest them.

Congrats to WattsThatGrin and all Tesla fanboys who had confidence in Elon and the company.

Captain_Zap | 03. April 2017

If we break the 300 barrier it may get very interesting!

Mel. | 03. April 2017

Stock splits are so 1990's.. no splits please.

Bighorn | 03. April 2017

AAPL is up 55% since its split less than 3 years ago. Wonder it that would have happened with $1000 shares. I have shares I probably wouldn't have otherwise. Even Warren Buffett lets in the "little guy."

Mel. | 03. April 2017

You lack understanding .. Amazon is the company to look at . Musk does not need the expense of a split.
How many stock splits has Berkshire Hathaway had?

Bighorn | 03. April 2017

BRK.B had a 50:1 split in 2010 after the 30:1 split used to create affordable shares of Berkshire. Please educate me as to your cryptic insult, oh great one.

Mel. | 03. April 2017

BRK. A. Trading today over 250,000.00. per share
. When Tesla has been around for a few more years and can have time to have class a and b shares then they can split one if they have nothing else going on.
You do need 300 dollars to buy a share of Tesla ..if you have not saved the 300 yet, then you need to continue putting money away, until you have enough.

Bighorn | 03. April 2017

Where do you think the bulk of BRK shares are traded--A or B shares? Hint: B by a ratio of 10,000 to 1 which is significantly more than the 1500:1 value differential: so the great majority of BRK money traded is in B shares. Not only are individuals priced out of the market at that level, so are institutional investors that have rules about maximum share price transactions. One of the reasons AAPL split 7:1. You have made no cogent argument--just an elitist one. Let them eat cake.

Captain_Zap | 03. April 2017

I like splits. I don't like odd lots. I must be a bit sentimental

Mel. | 03. April 2017

Captain _zap,
You explained it

Mel. | 03. April 2017

Can anyone tell us about the rules that institutional investors have about maximum share price per transaction?
Time to call shenanigans.. or is it just fake news?

barrykmd | 03. April 2017

Captain_Zap - do you also prefer fractional shares divisible by 1/8? :-)

Captain_Zap | 03. April 2017

I'd like to buy more leaps and options. They are only sold in lots of 100. No mini options for TSLA.

AlMc | 03. April 2017

@CZAP: That is a better strategy than 'buy and hold' *IF* you are convinced that the SP will rise. I sold shares to free up cash to buy J19s a couple weeks ago. :)

NomoDinos | 03. April 2017

Ahhhhh, I couldn't take it anymore, too tempting. I sold half my TSLA at 298.

Still rooting for it to go up, but this way I won't cry if it comes back to earth (like a Falcon X).

SbMD | 03. April 2017

@ Mel -"Can anyone tell us about the rules that institutional investors have about maximum share price per transaction? Time to call shenanigans.. or is it just fake news?"

Not fake news at all. The link that @BH posted confirms that this is the case for a number of institutional investors, but let's dig a bit deeper.

It is not a hard and fast rule, but some funds/investment vehicles are structured in such a way to avoid high-priced share transactions. High-priced shares come with some disadvantages: lower liquidity with greater price swings, and make it difficult to leverage equities against a fund's comparison index; the latter can affect the apparent and real performance of a fund. Hence, a number of institutional investors will set stock price limits to make fund management easier.

There is something to be said about the advantages of a stock split: stock split companies outperform the broader market over 1- and 3-year periods. It increases liquidity and can reduce price volatility. There is the psychological factor, as well as the ability for the individual investor to put the stock within reach. Furthermore, portfolio management is easier when having to deal with lower cost/share. If you trade options, selling put options are easier with lower share price, among other options contract benefits.

Whereas the mechanics of a stock split don't create a fundamental change in market value nor ownership, there are significant advantages to a stock split.

Bighorn | 03. April 2017

So I guess everyone reads my private correspondences with Elon:)

Ross1 | 04. April 2017

Yep.
Read one in the subway bathrooms yesterday

Mel. | 04. April 2017

SbMD,
What you say sounds good but I think you are looking in the past where stocks that were hot tended to split. It was not the split that moved them but the underlying business. Back in the 90's you had many hi tech companies like Intel and Microsoft. Today you have Google , new name Alphabet, Amazon and other hot stocks that are doing great..
If Ford split ,do you really think it would do better?
sounds facetious, but hopefully makes a point

Captain_Zap | 04. April 2017

I can think of plenty of reasons to split a stock, but I can't think of one reason to not split.

Captain_Zap | 04. April 2017

We broke $300!

Bighorn | 04. April 2017

+1 Zap
though I can think of a reason not to split--if you're Ford and your stock price is $11. What a mindless retort without any discernible point.

JAD | 04. April 2017

Just passed $300 per share!

Chunky Jr. | 04. April 2017

Not sure how much the retail investor matters to these companies, but I often hear from friends and family how they like stock splits. They see it as a sign of optimism from the splitting company, and they'd rather buy 100 shares for $25 than 10 shares for $250. Psychology is a big deal, which is why almost all prices end in .99 rather than .00

Mel. | 04. April 2017

SbMD,
Not to put you on the spot, but,if you can please give me the name of 1 institution that is adverse to buying high priced stocks. Also could you give me the cutoff of high priced. In the Apple case they thought it was 700.

carlk | 04. April 2017

If nothing else there will still be psychological effects from stock split. You can never take the emotion part out of stock purchasing. People tend to be more willing to buy a stock that have risen from 20 to 30 than from 200 to 300.

carlk | 04. April 2017

Just saw that Chunky said the same thing. Yes the confidence of company that does split is another factor too. On that point Tesla's last offering was lower than people expected has been another good sign too. Tesla did not want to sell too many shares because it thought stock price will rise that it could get a better deal later should it need additional financing. Looks that was the absolutely right thinking.

Mel. | 04. April 2017

"Death of the Stock Split" is the title of articles , in September and October 2016, that appeared in The Wall Street Journal, Barron's, as well as others like Jason Zweig.

carik,
I do not disagree with you , just pointing out what is happening to the Stock Split and why?
I would prefer going back to fractions and stock splits , but this is before high frequency trading.

Captain_Zap | 04. April 2017

Headlines like this yank my chain.
Electric car maker Tesla passes GM as most valuable U.S. car company
http://finance.yahoo.com/news/electric-car-maker-tesla-passes-152713642....

Apples and Oranges. GM's market cap doesn't include the value of all those dealerships. GM sells wholesale cars to Dealerships. Tesla sells at retail AND owns the Service Centers and Superchargers.

SbMD | 04. April 2017

@mel - I understand your skepticism but god luck with the following:
1) having an institutional investor give away the mechanics of their fund
2) refuting studies which took place in the last few years.

My points are not only valid, they are research proven. You seem to be more anecdotal.

SbMD | 04. April 2017

God luck -> good luck.

JAD | 04. April 2017

Captain, granted there are many ways to value a company, but the mere fact that some of them show silly little California startup making fancy golf carts is more valuable than Ford or GM is quite a statement on how people view the future of the automobile...

Mel. | 04. April 2017

SbMD,
Sorry I missed something I guess. What studies took place in the last 2 years that contrast with what the WallStreet Journal and Barron's had to say about 6 months ago?

SbMD | 04. April 2017

@mel - read Zweig's piece again on the Death of the Stock Split. I think you missed the point of the article. It doesn't condemn the split but is a snapshot of the moment. In fact he does make points which support splitting.

SbMD | 04. April 2017

@mel - If you have the expertise to look at the research and aware that the less robust pieces are in Barron's and WSJ, you will understand why I have made the points above. I am sourcing studies done out of Whartons and London School as well as other sources. It isn't that hard to find more objective data. But I apologize that this Forum is not really the best way to present such information in depth. Not trying to flame you, but you are not really looking at data in a way that should be an informed position.

And perhaps you should be aware that institutional investors have funds devoted to stock splits for the reasons I cite above. Their performance has been very good, running into double-digit returns. Disclosure: I don't own any such fund but rather recapitulate such ideas with my own investing. Works great.

carlk | 04. April 2017

JAD No one can predict the future but stock market has always been the best, not perfect of course, indicator of future of a company or the economy. People can say anything they want but when it comes to vote with their own money they got to be very serious. People do not view Ford or GM as a company that has great future. C_Z has a good point that Tesla and GM/Ford are different types of company too.

Mel. | 04. April 2017

SbMD,
Please share at least one of the studies that too place within the last 2 years that conflicts with the articles in the Wall Street Journal and Barron's that was published about six months ago.
Also do you have inside info on an institution that will not buy high priced stock? Could you give me at least a time frame when these studies took place?
i would love to know who these institutional investors are you follow. Can you say or is that another secret?

Last question. What do you consider a high priced stock that should split. apple used 700 last time they split. Do you have a Price?

Hope we are not talking past each other. Enjoy your posts on this forum.

SbMD | 04. April 2017

@Mel - much appreciated, and happy to give what information I can. My review stretches from the substantive papers dating 1997-2012, more recent updates in different sources including some sources which are unpublished, as well as some of the seminal papers from the late 60s.

For the most part, stock splits tap into the phenomenon of Behavioral Finance, but there are other "real" effects such as liquidity. My take on the pieces in WSJ/Barron's (and I haven't read the Barron's piece you reference, but the gist has been discussed elsewhere) is that the effect of stock splits has diminished compared to their historical performance, but there is still an effect. This downplaying of splits is also a bit of behavioral finance on a number of levels. Translated: if you de-emphasize stock splits and let stocks run up higher, it makes splits appear "less desirable". Thus it happens less frequently. Regardless, splits still add to liquidity and lead to a gain in the stock over time. This liquidity can be good or bad (see below).

Here's a particularly interesting paper that looks at more recent effects of stock splits and compares it to the Shanghai stock market, which has different motivations for splits:

http://www.cicfconf.org/sites/default/files/paper_344.pdf

As for institutional investors that will not buy a high priced stock: I have some educated guesses, but won't speculate. One example, though, is the DJIA and the indexes which follow it; it will not add a component with a share price that is too high, as a single stock outweighs others heavily. This is what happened with Apple, which was added only after the split made it accessible for addition to the DJIA.

A high priced stock that should split: it is a complex series of circumstances which dictate whether a company should explore a stock split and not just based on price. Apple's split is a good example, again. Tim Cook said famously that stock splits "do nothing for shareholders", and then later he split the stock. This decision was multifactorial.

Coming back to Tesla: I don't know if/when Tesla would split. There are some advantages to keeping share prices at this level. Sometimes such liquidity is not desirable.

Mike83 | 05. April 2017

I have yet to see a new high. But my charting does show a 360 before leveling; but it is all guess work and could be much higher than 304. Doesn't matter for me as i am long term. Recently I read that a few people are just beginning to realize that Tesla is much more than a car company. Surprise!

Pages