On May 1st, 2020, the co-founder and CEO of Tesla, Elon Musk, posted a tweet under his personal account: Tesla stock price is too high
On May 1st, 2020, the co-founder and CEO of Tesla, Elon Musk, posted a tweet under his personal account: "Tesla stock price is too high imo". Within one hour after his tweet, Tesla's stock price dropped by 9.1%. [Note: imo = in my option]
a. Please use what we learned in class to explain why his opinion had drawn swift reaction from investors.
b. Assume the tweet reflects truth about Tesla. Currently (April 30th), the firm is about to make a payout decision, would you recommend Tesla to pay cash dividends or to repurchase shares? Why?
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Authors: Herbert B. Mayo
10th edition
1111820635, 978-1111820633
