3 ms·
>So long as the valuation goes up enough to compensate for the dilution, the per share stock price will be the same or higher But per stock price is the "valua
by prolly_a_moron 10y ago
>So long as the valuation goes up enough to compensate for the dilution, the per share stock price will be the same or higher
But per stock price is the "valuation".
My comment re: being detached stems from the fact that on Day X, you can buy Tesla for price $Y. Then Tesla sells more shares (dilution). So now each individual share represents a smaller proportion of company ownership...yet the next day people are willing to pay more for that smaller ownership.
Obviously there are far more dynamics at play; but generally, dilution should cause the price to drop.
- salesguy222 10y agoIt seems to me that people viewed Tencent's purchase as signifying confidence in Tesla from a legitimate, cash-stacked player. As a result, it was all aboard the hype-train for retail investors to secure their seat in yet another speculative rocket ship. Tesla's ability to deliver has been in question for a bit. This cash will be used as fuel to prevent the rocket ship from experiencing a sudden, gravity-induced trajectory into the earth's crust