Apple-Tesla: "The valuations of Internet stars too often escape rationality" – Le Monde

Apple Tesla quotThe valuations of Internet stars too often escape rationalityquot - Apple-Tesla: "The valuations of Internet stars too often escape rationality" - Le Monde

Losses & profits. It's official, "Robin Hood" rides a Tesla. Robinhood is the most popular smartphone app in the United States for stock market gambling. It takes no commission and makes buying and selling stocks a snap. Easier than casinos, more lucrative than sports betting, stock market gambling became the hobby of millions of Americans, especially younger ones, during the lockdown. In less than three months, Robinhood has grown to become the country's leading online brokerage, with over 4 million transactions per day. This unprecedented enthusiasm reflects the great return of individual investors to the American Stock Exchange.

High growth stocks

According to Wall Street Journal, these represent some days up to a quarter of the volume of exchanges and 20% on a daily average, while this share had fallen well below 10% after the financial crisis of 2008. It is to pamper this modest clientele but that Tesla has announced a division by five of the nominal value of its stock on the stock market. It must be said that, since the beginning of the year, its share price and market capitalization have increased more than fivefold.

This enthusiasm of individuals reflects the hope of rapid enrichment and focuses primarily on technology

The practice is common in America for very high growth stocks. Apple, another darling of young adventurers on the coast, has divided the value of its title five times in its history and has just done so this summer. This personal enthusiasm, which can also be found on the Korean and Chinese stock exchanges, reflects the hope of a whole generation of rapid enrichment and focuses primarily on technology. Not crazy, Tesla, whose results are still fragile, immediately picks up the bet. It announced on Tuesday, September 2 that it would issue $ 5 billion in new shares to finance its development.

Read also Why Tesla is dividing its stock price by five

It’s prudent indeed. Because these investors looking for quick wins worry about the long-term prospects. For the old ones, this perfume has a name: the bubble. "When my driver gives me stock advice, I know it's time to sell", Rockefeller would have said. The valuations of internet stars too often escape rationality. Especially since the current monetary policies of central banks facilitate indebtedness but reinforce financial instability and the formation of bubbles. "Robin Hood" shows us the way to the next financial crisis.

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