Tesla is a great example. It’s 30% retail, 25% elon and insiders, and the remainder institutional, mostly index funds.

The investment thesis for Tesla is absurd. They built the market cap on hype and it got big enough that it remains a force. It’s a flailing company, kept afloat by bullshit.

The bigger issue is the death of small cap. Massive venture, sovereign wealth and PE funds don’t need the public market capital anymore, so they harvest the vslue and spit out the company late in the value cycle.

Snap, cool as it is, is a social media loser. The investors cashed out their shares to the public, who took the loss.

> The investment thesis for Tesla is absurd. They built the market cap on hype and it got big enough that it remains a force. It’s a flailing company, kept afloat by bullshit.

Maybe, or maybe they are one of the few businesses people want to bet on to be able to create new streams of revenue. Intel used to be big, and now it isn’t. It being big didn’t help stop its demise.

> The investors cashed out their shares to the public, who took the loss.

They didn’t. The biggest investors, the founders, still have almost 50% of the shares. Also, SNAP peaked at $131B in September 2021, 2 years after SNAP went public at $27B.

Would you have written then that “The investors cashed out their shares to the public, who took the loss”?

Of course not. Because index fund investors did not cause it to go to $131B, and they didn’t cause it to go to $6B.

The fact that founders still own 50% of the shares doesn't mean that they didn't sold some of ones they had. Also Snap gives very generous stock options to their C-team, meaning that they can sell overtime while keeping their large stash.

In your previous post, you complained

> so they harvest the vslue and spit out the company late in the value cycle.

So SNAP executives IPO’d at $27B, and over the next 4 years, the market cap increased to $131B, which anyone in the public could have benefited from.

Yet now you are saying SNAP execs are wrong for selling their equity over time?

It doesn’t seem like there is any winning here for SNAP’s executives, even though they gave the public the ability to quadruple their money in 4 years. What more can you ask for?

Even if Tesla is overvalued, surely 1 example is insufficient to substantiate that mass stupidity is being rewarded.

I spent many words explaining that the list of businesses at the top are basically at the top of their game, worldwide.

you wrote "can you provide an example" and I provided an example. If you wanted to say "I think the market mostly does this, with large caveats" then we're in agreement.

Sorry, I forgot how I phrased that. Although I disagree that Tesla’s sustained market cap over many years is what it is due to the market rewarding mass stupidity.

The company has recently successfully executed at making and selling a new type of product, so it is not unreasonable for investors to bet on further advancements.

Or maybe they think the leader is just sufficiently willing to be or adept at being corrupt that they will also benefit from his shenanigans.