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.