Why does it feel like Elon is artificially boosting his companies? (programming.dev)

submitted 3 months ago by kn0wmad1c@programming.dev to c/asklemmy@lemmy.world

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Tesla dealerships are getting protested and, in some cases, vandalized. Sales are down on 9 of the top 10 countries Tesla sells in. Yet Tesla stock is up. Twitter is a cesspool of nazi-themed bots, and somehow just pulled in $1bn and raised its valuation back up to $44bn.

How is any of this possible? It seems really artificial to me, but I don't really understand business.

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[-] Ziggurat@jlai.lu 1 points 3 months ago

Something that is very easy to forget is that stock value is only very loosely tied to actual company value. Stock value is based on what people are prepared to pay for the stock, not what the company is worth.

Which IMO is a real problem in Tech companies If I look at more traditional industries, A coca-cola stock gives me ~ 0.50 US$ per quarter, so with an expected yield of 3% I am ready to buy a stock at US$ 66. and the current market value is US$ 68, if I do the same exercise for Airbus with 2 EUR of regular divident and 2 EUR of exceptional dividend and that I expect a 3% yield, I would pay 133 EUR for an airbus stock, for a market value of 166. A worse investment than Coca-cola, but still a decent one especially considering the raise of the military companies.

And then there is tech company giving no dividend and using stock buyback (How is that even legal) to keep the company value artificially high.

this post was submitted on 22 Mar 2025

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