By Elias Kott, Contributing Writer
SIMM and Stock Market-Related News Members SIMM (Students in Money Management) opened up the week with its semi-annual picture day. After pictures, junior Chris Bortuzzo gave members a breakdown of a very important financial statement called the statement of cash flows.
The statement of cash flows is a type of financial statement that reveals how a company is spending its cash over a period of time. It is regarded as a very important financial statement because it helps indicate the financial health of the company. It also breaks down how a company’s cash flows through its operating (day-to-day), investing (long-term) and financing activities. As of Feb. 3, 2020, SIMM’s portfolio is worth $417,050.30.
In market-related news, major US indexes have carried momentum from last week’s gains into this week. As of Feb. 5, the Dow Jones sits at 29,290.85, S&P 500 at 3,334.69 and Nasdaq at 9,508. A potential coronavirus vaccination is a big reason for the recent success of these major indexes.
Arguably the hottest stock this week has been Tesla, which trades under the ticker TSLA. Tesla has had a wild week, reaching as high as $962, which represents over a 50% increase. While Tesla recently posted positive news regarding the company’s financials, it’s difficult to completely fathom why their stock has rapidly increased at unprecedented levels. When an investor believes that a stock is going to go down in the foreseeable future, they initiate a short-sell position. With Tesla being one of the most shorted stocks in the entire market, what possibly happened is that short sellers exiting their position largely contributed to the rise in demand of Tesla. When a short seller wants to exit their position, they essentially have to buy back their share, also known as buying to cover. Since so many short sellers are covering at once, this initiates what is known as a short squeeze which causes the price of a stock to rapidly spike.
Although Tesla’s stock has risen drastically, it is highly anticipated to go back down once most short sellers cover their position. This has already started going into effect, where Tesla is currently trading at $742. Recent news in China has also contributed to Tesla’s stock declining to $742, where it currently sits as of Feb. 5. Tesla announced that due to the coronavirus, some of Tesla’s Model 3 deliveries in Shanghai will be delayed as its plant has been shuttered for nearly 2 weeks. Although it has recently been a rollercoaster ride for Tesla, as a coronavirus vaccine eventually develops and people continue to recover, Tesla’s volatility is expected to decrease and stabilize in the near future.
To learn more or stay up to date with other SIMM-related news, go check out SIMM’s website at https://www.simm.org or follow them on twitter at BonaSIMM.
kottej18@bonaventure.edu
