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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 engage
by 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.