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As I said nine days ago in this box and was roundly downvoted therefor: "Good chance that Musk will get placed on the bad actors list and will be unable to serv

by romed 8y ago

As I said nine days ago in this box and was roundly downvoted therefor: "Good chance that Musk will get placed on the bad actors list and will be unable to serve as an officer or executive of Telsa." What I don't understand is how this took 10% of the price of Tesla shares. How is it possible that this event, which was a 100% certainty, was not already baked into the price?

bmmayer1 8y ago
My guess would be, a good number of TSLA investors--probably more than most publicly traded stocks--are retail investors.
ucaetano 8y ago
> How is it possible that this event, which was a 100% certainty, was not already baked into the price? Nothing is ever 100% certainty. And this isn't the outcome, just the lawsuit. There is plenty still left to chance. But I've just ordered a 5-ton bucket of popcorn!
daveguy 8y ago
I think most people thought Musk would get off with a fine. For a company partially driven by a cult of personality (at the very least given a significant benefit of the doubt). That hope was diminished and without Musk the entire company will be perceived differently.
cam3ham 8y ago
the market is emotionally reactionary. if it was baked in (and like you, I believe it was) it will bounce back tomorrow.
dnautics 8y ago
...and your flaw was in believing the market is efficient.
tedunangst 8y ago
The outcome wasn't 100% certain? There was supposed to be a settlement, presumably milder in sanctions, but then Musk said no thanks. The share price reflected the possibility that Musk might play nice. Now he won't; now it doesn't.
tinkerteller 8y ago
Almost everyone except you has been surprised so that should give you a clue. The Bayesian probabilities are all relative :). If you did believed 100% then you should have shorted the hell out of that stock. But you didn't so my guess is that even for you it was more like 90%.

by romed 8y ago

bmmayer1 8y ago

My guess would be, a good number of TSLA investors--probably more than most publicly traded stocks--are retail investors.

ucaetano 8y ago

> How is it possible that this event, which was a 100% certainty, was not already baked into the price? Nothing is ever 100% certainty. And this isn't the outcome, just the lawsuit. There is plenty still left to chance. But I've just ordered a 5-ton bucket of popcorn!

daveguy 8y ago

I think most people thought Musk would get off with a fine. For a company partially driven by a cult of personality (at the very least given a significant benefit of the doubt). That hope was diminished and without Musk the entire company will be perceived differently.

cam3ham 8y ago

the market is emotionally reactionary. if it was baked in (and like you, I believe it was) it will bounce back tomorrow.

dnautics 8y ago

...and your flaw was in believing the market is efficient.

tedunangst 8y ago

The outcome wasn't 100% certain? There was supposed to be a settlement, presumably milder in sanctions, but then Musk said no thanks. The share price reflected the possibility that Musk might play nice. Now he won't; now it doesn't.

tinkerteller 8y ago

Almost everyone except you has been surprised so that should give you a clue. The Bayesian probabilities are all relative :). If you did believed 100% then you should have shorted the hell out of that stock. But you didn't so my guess is that even for you it was more like 90%.