On November 6th, 2021, Elon Musk tweeted that ****he would sell 10% of his stake in Tesla following the outcome of a Twitter poll. In this post, I use this episode as a lens into theories of asset demand and their role for prices. I have benefited greatly from discussions with Aditya Chaudhry.
Here's Elon's tweet and the outcome of the poll:
The price dropped from 1,221.79 on Friday 4pm to 1,148.41 on the next Monday 9:30am, which is a negative realized return of around 6%:
How do we make sense of this pattern, assuming no material fundamental information (large enough to cause the price drop) about Tesla was released over the weekend?