Tencent buys 5% of Tesla

Re:Tencent buys 5% of Tesla by hangonhn on Tuesday March 28, 2017 @01:00PM (#13978321)

How is that really any different from any Silicon Valley company raising a new round of money? So long as the valuation goes up enough to compensate for the dilution, the per share stock price will be the same or higher. I'm not saying the valuation is correct but the fact that dilution happens and stock price goes up isn't that had to reconcile, right?

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Re:Tencent buys 5% of Tesla by prolly_a_moron on Tuesday March 28, 2017 @03:12PM (#13979681)

>So long as the valuation goes up enough to compensate for the dilution, the per share stock price will be the same or higher

But per stock price is the "valuation".

My comment re: being detached stems from the fact that on Day X, you can buy Tesla for price $Y. Then Tesla sells more shares (dilution). So now each individual share represents a smaller proportion of company ownership...yet the next day people are willing to pay more for that smaller ownership.

Obviously there are far more dynamics at play; but generally, dilution should cause the price to drop.

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Re:Tencent buys 5% of Tesla by salesguy222 on Tuesday March 28, 2017 @06:04PM (#13981170)

It seems to me that people viewed Tencent's purchase as signifying confidence in Tesla from a legitimate, cash-stacked player.

As a result, it was all aboard the hype-train for retail investors to secure their seat in yet another speculative rocket ship.

Tesla's ability to deliver has been in question for a bit. This cash will be used as fuel to prevent the rocket ship from experiencing a sudden, gravity-induced trajectory into the earth's crust

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