A friend told you that she was scrolling through her Twitter feed and found out that three days ago, Hertz Corporation (rental car company) ordered 100,000 Tesla cars to build out its rental fleet of electric vehicles. The cars will be delivered to Hertz throughout 2022 and Hertz will rent them to travelers. Aside from the revenue from the Hertz sale, Tesla likes the deal since more people will be exposed to the Tesla brand. They think this could boost future sales. Your friend said that this was her lucky day since she can buy Tesla stock and make some easy money when the stock price rises due to the increased sales of the cars. What do you think of this situation and to the extent you are being asked for free advice what do you tell her?
A friend told you that she was scrolling through her Twitter feed and found out that three days ago, Hertz Corporation (rental car company) ordered 100,000 Tesla cars to build out its rental fleet of electric vehicles. The cars will be delivered to Hertz throughout 2022 and Hertz will rent them to travelers. Aside from the revenue from the Hertz sale, Tesla likes the deal since more people will be exposed to the Tesla brand. They think this could boost future sales.
Your friend said that this was her lucky day since she can buy Tesla stock and make some easy money when the stock price rises due to the increased sales of the cars. What do you think of this situation and to the extent you are being asked for free advice what do you tell her?
In this case the information obtained by my friend on her Twitter feed is a public information i.e. a piece of information that is not confidential but is known to all.
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