The market capitalisation of Tesla fell from about $1tr at the beginning of Jan 2022 to about $330bn at the end of Jan 2023 in spite of car deliveries increasing by 40% year on year. Part of the drop was believed to be associated with the fact that Tesla's founder sold a substantial holding of shares in Tesla to fund his acquisition of Twitter. How consistent is this evidence with markets being efficient? Explain.
The market capitalisation of Tesla fell from about $1tr at the beginning of Jan 2022 to about $330bn at the end of Jan 2023 in spite of car deliveries increasing by 40% year on year. Part of the drop was believed to be associated with the fact that Tesla's founder sold a substantial holding of shares in Tesla to fund his acquisition of Twitter. How consistent is this evidence with markets being efficient? Explain.
Chapter12: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 3P
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Question 7.
The market capitalisation of Tesla fell from about $1tr at the beginning of Jan 2022 to about $330bn at the end of Jan 2023 in spite of car deliveries increasing by 40% year on year. Part of the drop was believed to be associated with the fact that Tesla's founder sold a substantial holding of shares in Tesla to fund his acquisition of Twitter. How consistent is this evidence with markets being efficient? Explain.
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