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I found this WSJ article about $YHOO’s entry to the S&P 500 from 12/8/99. Parallels vs $TSLA are striking: YHOO was a new entry to S&P 500 (not a step up), institutions’ widespread skepticism to YHOO given 1,000x+ P/E, very loyal retail investor base, first internet entry to S&P.
2/ Yahoo soared 63% betw 11/30/99 announcement and 12/8/99 inclusion, including stunning 24% on 12/7, the last day before inclusion. +63% would put $TSLA at $665. YHOO kept increasing after inclusion and only collapsed with other tech stocks in 2000 as the internet bubble burst.
3/ What’s changed vs 1999:
1) S&P index funds/ETFs were only 3% of S&P mkt cap of $12.0T.
2) YHOO went into S&P at ~0.5% float-adj wt vs $TSLA 1.5% wt.
3) Hedge funds were $200B total AUM in 1999 vs $3.3T today.
4) Trading commissions have collapsed from $.05/sh to zero today.
1) S&P index funds/ETFs were only 3% of S&P mkt cap of $12.0T.
2) YHOO went into S&P at ~0.5% float-adj wt vs $TSLA 1.5% wt.
3) Hedge funds were $200B total AUM in 1999 vs $3.3T today.
4) Trading commissions have collapsed from $.05/sh to zero today.
4/ In $TSLA ‘s favor, 17% of TSLA float needed by indexers vs only 3% YHOO float. TSLA index wt is 3x as large as YHOO. Negatives: Hedge funds (16x size) and RH/speculator base far larger today and trade for free. I continue to expect TSLA to peak at low end of $650-$690 range.
