Wow, today's TSLA price action:
- The $320 price barrier seems to be holding strong for a second day. Will it survive end of Friday weekly options expiry machinations?
- Only around $4 of volatility today - the historical average daily range for TSLA is $10-$17 (!). If the trading range gets reduced longer term due to the barrier and due to constant selling pressure then this would explain recent decreases in options premiums.
- TSLA ignored the big rise in NASDAQ and the usual correlations with macro were a lot weaker than usual. My guess is that some correlation/arbitration desks noticed the strong barrier and stopped correlation-trading TSLA.
I'm really curious about whether the barrier is going to survive today and whether it will be present next week as well.
If yes then one (speculative) interpretation of the barrier would be that:
- Elon Musk's Tesla buyout consortium is buying all shares below $320, and are putting them into a common pool.
- That pool will be distributed among the buyout partners, in proportion of their contributions to the $420 buyout. This solves the 'front running problem' between buyout partners rather elegantly.
- This reduces the cost of the buyout significantly, especially if they start raising the price barrier to get closer and closer to $420, to trigger more and more selling from shareholders who cannot or don't want to own $TSLAP shares.
Haven't seen anything like this before - does anyone know of a historical example of merger/buyout partners installing a price peg in the open market?
Or could this be a third party perhaps, a really strong buyer or merger/buyout arbitration trader?