TL;DR

Tesla’s inexplicable surge despite bad news has retail investors crying foul, suspecting manipulation by “Elmo” himself. Are we witnessing another pump-and-dump scheme, or is this just the market being irrational?

Story

John, a hopeful retail investor, watched his Tesla (TSLA) puts evaporate like a mirage. He’d bet against the stock, expecting a drop after dismal European sales figures. Instead, TSLA inexplicably surged 13%. John wasn’t alone. WallStreetBets, a forum notorious for its risky options plays, was buzzing with confusion and suspicion.

Something smelled rotten. Unusually large buy orders near closing time, coupled with the stock’s defiance of logic, hinted at manipulation. Was Elon Musk, affectionately nicknamed “Elmo” by the internet, pulling strings? The situation felt eerily reminiscent of past market scandals. Remember Enron’s accounting tricks or the 2008 subprime mortgage crisis? History teaches us that unchecked greed often leads to disaster.

‣ Puts: A bet that a stock’s price will go down. Like buying insurance against a fall. ‣ WallStreetBets: An online forum where retail investors discuss high-risk trades, often using options.

The mechanics of this potential fraud are still unfolding, but the whispers are growing louder. Massive, strategically timed buy orders could be artificially inflating the stock price, trapping unsuspecting investors like John. It’s like a house of cards: eventually, the truth will come out, and the crash could be devastating.

This alleged TSLA pump-and-dump scheme highlights the dark underbelly of the market. It preys on naive investors lured by the promise of quick riches. The human impact? Devastating financial losses, shattered trust, and a reinforced cynicism towards the system.

‣ Pump and dump: An illegal scheme where the price of an asset (like a stock) is artificially inflated (pumped) and then quickly sold off (dumped) for a profit.

What can you learn from this? Be wary of stocks defying fundamental logic. Huge price swings without clear justification? Giant buy orders at suspicious times? These are red flags. Don’t let FOMO (Fear Of Missing Out) cloud your judgment. Investigate before you invest.

Advice

Don’t blindly follow the hype. Research before investing, and be extra cautious when a stock’s price movements don’t match the underlying news.

Source

https://www.reddit.com/r/wallstreetbets/comments/1jjt9qf/stop_buying_tsla_puts/