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It works like that for companies with normal, fundamentals based valuation. Tesla stock is hype driven meme stock for last few years, and it’s very plausible th
by justapassenger 6y ago
It works like that for companies with normal, fundamentals based valuation. Tesla stock is hype driven meme stock for last few years, and it’s very plausible that even a huge raise would result in stock price going up. It’s a huge party like it’s 1920s again.
- tanto 6y agoI don't think you are correct. You imply there are a lot of people willing to buy for the current price. I think the scenario is different. A professional trader is happy if he makes 10% or 20% a year. This is considered for most a great achievement. The average Joe whose friend told him that he can get rich buying Tesla stocks will only sell for 200%, 300% or even 1000%+ on his micro shares. We got a market full of people which go in and buy for whatever is there and try to sell for a lot more. Sometimes they panic and sometimes they forget about it. Additionally we currently have a lot of index funds forced to buy because of the inclusion. Which is genius move of Musk/Mizuno and others. It's hard to predict where Tesla, Zoom and others will end up. I wouldn't dare to make any prediction. They might grow into their evaluations given time or a lot of average Joe's might decide its time to pay rent or even buy a house. Let's wait and see.