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> What benefit has Musk or Tesla received from fighting with regulators? Same as Peloton. Let's say there are two kinds of people. People who open Robinhood a
by an_opabinia 5y ago
> What benefit has Musk or Tesla received from fighting with regulators?
Same as Peloton.
Let's say there are two kinds of people. People who open Robinhood and buy shares at ask, and everyone else. As long as there are more of the former than the latter, and as long as those Robinhood users like spats, then obviously giant company CEOs will keep getting into them.
Buying at ask is as direct as it gets! You don't need this some complicated socioeconomic mechanical theory. It's so frustrating to hear about these indirect effects - how the news might cause an analyst to write something negative months later, that maybe some institution may trade on one month, that goes through a big committee... If many Robinhood users read Elon Musk tweets, open Robinhood, buy at ask, price goes up!
Like this is the same energy that got a lot of politicians elected these last few elections. The same energy that's making TikTok personalities real celebrities. VIPs have their hands almost directly on the levers of popularity contests nowadays, through social media and direct to consumer finance, e-commerce and subscription apps.
If your theory about regulation and capitalism and economics or whatever does not incorporate "more guys buy at ask than guys sell in spread," nowadays, it might not be wrong, but it's mediocre.
- bigfudge 5y agoCan you Eli5 why buy at ask is the wrong thing to do if you want to buy shares? What is the alternative? Do you mean you should wait/ time buying based on price?
- sokoloff 5y agoI rarely submit market orders (which is what "buy at ask" translate to), even for securities that I know I want to buy. Only in extremely deep markets am I prone to use a market order. What are the alternatives? Limit orders set close to the current range or selling near-the-money puts over and over until you're eventually assigned.
- slg 5y agoI'm not sure what you are trying to say in relation to my question. I wasn't asking for the benefit that Musk received in relation to his actions like Tweeting about Tesla's stock price, busting unions, etc. That benefit is obvious. I was asking what benefit he received from fighting with regulators about whether he committed those actions, whether they deserved punishment, and whether the regulators have jurisdiction, etc. Are you just saying that "there is no such thing as bad publicity" and that anytime Musk is in the news is good for the stock price? Because the original point from justapassenger was that "it pays off to fight with [regulators]" and not "it pays off to commit securities fraud".
- an_opabinia 5y ago> what benefit he received from fighting with regulators... whether he committed those actions... and that anytime Musk is in the news is good for the stock price? The direct answer to your question is, since Robinhood users like those n-th order fights, he still got a benefit through the rising Tesla prices those Robinhood users caused. But you're doing the thing where you're trying to make a model or a theory that starts stepping away from the direct mechanisms of action these people have now to affect stock prices. I'm saying that a tweet from the Peloton CEO that just said "regulators are big doodoo heads" - if there are more Robinhood users who buy Peloton at ask than everyone else, and they like this tweet, the price will rise because that's how prices rise. That's why you don't need a lawyer, you don't need the professional advice or the experts, if you're Elon Musk and your goal is to make stock prices rise. What you're really trying to ask is, "When do smart people decide to stop being intellectually honest?" The answer is, as long as the intellectually honest text is longer than a short, simpler, stock-raising tweet with verisimilitude, people will choose short and high in verisimilitude over longer but true.
- slg 5y agoI don't know, your comment seems to be overcomplicating an argument that appears to boil down to "there is no such thing as bad publicity" and we should know that isn't true in terms of stock prices or else they would never go down based off bad news.
- thegrimmest 5y agoI think he's saying that fighting with regulators is good publicity for the people who are interested in buying TSLA shares.