The Lemon Fool

A question for those more experienced than me (most of you!):

Now that Tesla is in the S&P 500, and (presumably) the trackers have completed their purchases, can we expect Tesla to be less volatile, or are there too many other factors at play here?

As a short-term investment, they did me proud during December, but I'm seriously doubting their ability to continue as a short-term thing, and a chorus of voices says that the shares are overvalued (though to be fair, others disagree), which makes the longer-term investment doubtful, at least until they start making serious profits.

Heinous wrote:A question for those more experienced than me (most of you!):

Now that Tesla is in the S&P 500, and (presumably) the trackers have completed their purchases, can we expect Tesla to be less volatile, or are there too many other factors at play here?

As a short-term investment, they did me proud during December, but I'm seriously doubting their ability to continue as a short-term thing, and a chorus of voices says that the shares are overvalued (though to be fair, others disagree), which makes the longer-term investment doubtful, at least until they start making serious profits.

Ah, yes, Tesla, that small-cap startup -- very interesting idea but will anyone have heard of them??

There's a long-running discussion here, where it is more on-topic:

viewtopic.php?f=76&p=371259#p371259


GS

GoSeigen wrote:There's a long-running discussion here, where it is more on-topic:

Thanks. I did see that.

Heinous wrote:

GoSeigen wrote:There's a long-running discussion here, where it is more on-topic:

Thanks. I did see that.

Heinous,

Simple answer = I don't know. There are various factors I can see might affect the volatility:

1. A lot (~15% I think) of free float will become locked up in index funds or benchmark funds, and since they will trade rarely that might make the price less volatile;
2. But since the remaining free float is smaller that means traders will have more effect on the price;
3. And it will now be 'on' the screens of those who were previously unable to trade it due to their fund remits (only S&P etc);
4. But it will be 'off' the screens of those who can no longer trade it due to their fund remits (only smallcap etc);

I too will be interested to see if there is really any difference to the above, as I think the following point is dominant:

5. TSLA's intrinsic business performance combined with the momentum investing (trading) going on into TSLA and into adjacent stocks.

Any other opinions from the more learned City types welcome.

regards, dspp

dspp wrote:Simple answer = I don't know. There are various factors I can see might affect the volatility: ...

Very helpful, and food for thought. I suspect there may some life left in them for short term investing, while they still might create more anxiety than one likes for the longer term!

Tesla takes another step on road to launch in India By Aditi Shah, REUTERS
NEW DELHI (Reuters) - Tesla Inc has moved a step closer to its launch in India later this year by registering a company in the country, a regulatory filing showed on Tuesday.
Tesla Motors India and Energy Private Limited was incorporated on Jan. 8 with its registered office in the southern city of Bengaluru, a hub for several global technology companies.
The filing shows the Indian unit has three directors including David Feinstein, who is currently a senior executive at Tesla, according to his LinkedIn profile.
India’s transport minister Nitin Gadkari told a local newspaper in December the U.S. electric carmaker would start with sales and then might look at assembly and manufacturing.

I'd be surprised if they didn't announce manufacturing within months: they currently have cash swilling around, and need to secure long-term value.

Heinous wrote:

Tesla takes another step on road to launch in India By Aditi Shah, REUTERS
NEW DELHI (Reuters) - Tesla Inc has moved a step closer to its launch in India later this year by registering a company in the country, a regulatory filing showed on Tuesday.
Tesla Motors India and Energy Private Limited was incorporated on Jan. 8 with its registered office in the southern city of Bengaluru, a hub for several global technology companies.
The filing shows the Indian unit has three directors including David Feinstein, who is currently a senior executive at Tesla, according to his LinkedIn profile.
India’s transport minister Nitin Gadkari told a local newspaper in December the U.S. electric carmaker would start with sales and then might look at assembly and manufacturing.

I'd be surprised if they didn't announce manufacturing within months: they currently have cash swilling around, and need to secure long-term value.

They will not want to give in to local partner rules, so I think they will be negotiating for 100% control. They won on that in China, so India knows what it has to do. Otherwise it will be a token effort as a placeholder imho.

regards, dspp