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That's correct, the stock market uses information from the present to make a determination about the future. Hertz isn't buying Teslas because they are engaged
by Kranar 5y ago
That's correct, the stock market uses information from the present to make a determination about the future. Hertz isn't buying Teslas because they are engaged in charity, they are doing it because they likely came to the conclusion that it's cheaper, or more optimal in some sense, to have a fleet of electric vehicles over ICE vehicles. Unless Hertz made a grave miscalculation, one can expect other vehicle rental companies to come to the same conclusion, along with other companies/industries that maintain large fleets of vehicles.
This move further entrenches Tesla in the electric vehicle space, along with all other related technologies (electric charging, insurance, battery technology, etc etc...). The truth is that most other car companies are just not well positioned to transition to electric vehicles.
- deleted 5y ago[deleted]
- nwiswell 5y ago> That's correct, the stock market uses information from the present to make a determination about the future. Hertz isn't buying Teslas because they are engaged in charity, they are doing it because they likely came to the conclusion that it's cheaper, or more optimal in some sense, to have a fleet of electric vehicles over ICE vehicles. Any market participant could _already_ have gone through the same calculus. There is no new public information except the decision itself, which by this reasoning was A) perfectly predictable and B) not inherently worth $100B
- coralreef 5y agoA contractual sales commitment is valued differently compared to a "what if" calculation.
- missedthecue 5y agoAs far as I can tell, there is no contractual sales commitment. Just a press release.
- stevage 5y agoExcept your average market participant doesn't have the same resources for that analysis as Herz.
- nwiswell 5y agoMany of them have more resources. Hedge funds have been using satellite photography to estimate Tesla's production numbers for years. The price is expected to move if even a few participants have the new information. https://news.ycombinator.com/item?id=20243810 https://news.ycombinator.com/item?id=20243810 Honestly I'm a little dumbfounded that people are arguing this is definitely a rational move in the price while we've got phenomena like GameStop still happening.
- vizzah 5y agoA bankrupt company Hertz has expressed intent to buy 100,000 Teslas to hype already hyped investors into bringing some fresh money into this venture. Currently, you need just a "cool" intent, preferably with some buzz words (crypto, "green", space..etc) and you are golden.
- ptr2voidStar 5y ago>Currently, you need just a "cool" intent, preferably with some buzz words (crypto, "green", space..etc) and you are golden. Alas, t'was ever thus.