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> In principle whoever holds TSLA at $238 does so because they think it's worth more than that. Not really, more like: - Investors holding TSLA think its fair
by chkuendig 11y ago
> In principle whoever holds TSLA at $238 does so because they think it's worth more than that.
Not really, more like:
- Investors holding TSLA think its fair priced at 238.
- Investors buying TSLA think its worth more than 238.
- Investors selling TSLA think its overpriced
Obviously these roles can overlap, but if you are a shareholder whos thinks TSLA its worth more than 238 you should take part in this offering and buy more stocks - even just to avoid the dilution.
- mikeash 11y agoIf you think the current price is fair, why would you hold the stock? Unless you think they're going to declare a dividend (not likely) then you might as well sell while the price is at a fair level and keep the cash.
- chkuendig 11y agoBecause it fits the asset allocation you want? Because selling costs you transaction costs without gaining anything? (if its a fair price the stock is worth exactly as much as the same amount in cash) I assumed that the likelihood and size of possible dividends is already included in your estimate of what the stock is worth.
- zardo 11y agoBecause you use a buy and hold strategy and only worry about how a stock performs long term.
- robotresearcher 11y ago> how a stock performs long term. i.e. increases in price. If it stayed the same long term there's no point holding it due to the opportunity cost.