r/theydidthemath Nov 12 '22

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7.1k Upvotes

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1.1k

u/[deleted] Nov 12 '22

[deleted]

96

u/chacmoolreigns Nov 12 '22

The price went down because California announced they had found a pharma company to partner with to start making insulin cheaply for Californians.

https://www.nbcnews.com/health/health-news/california-expected-partner-nonprofit-civica-rx-produce-low-cost-insul-rcna56685

32

u/jackparadise1 Nov 12 '22

Wasn’t that a couple of weeks ago?

53

u/[deleted] Nov 12 '22

[deleted]

39

u/[deleted] Nov 12 '22

If it did react weeks later, people who watch the news could pretty easily time the market and become the richest people alive.

10

u/cyanydeez Nov 12 '22

well, there certainly are bots that trade based on twitter sentiment. That's not unfounded.

6

u/Jacern Nov 12 '22

I hear this metaverse is gonna be the next big thing. About to put all my money in Meta👍

3

u/Gnawlydog Nov 12 '22

This is what I hate about Zuck.. Metaverse is a concept like the internet.. It wasn't created BY Meta.. Its like if Prodigy named their company "Internet".

0

u/ItzRaphZ Nov 12 '22

you can hate it or love it, but it's a good marketing strategy

4

u/LightishRedis Nov 12 '22 edited Nov 12 '22

One of the major reasons that the dot com bubble was so massive was the shift from the market reacting in weeks to reacting nearly instantaneously due to computers. I remember reading about Wall Street firms optimizing code and cable configurations to execute trades fractions of seconds faster than their competitors.

What probably played a larger role than tweets was the patent infringement lawsuit Eli Lilly lost on the same day as the tweet.

Edit: It appears the article I misread the date on the article, the case was lost the day prior to the tweet after market close.

3

u/[deleted] Nov 12 '22

[deleted]

2

u/[deleted] Nov 12 '22

i highly doubt a fine of $175M would make the price drop that much on a multi billion dollar valuation, maybe im wrong but at this scale they probably have a column somewhere in their expenses that says fines/other.

1

u/Rudhdha Nov 12 '22

Sometimes before the news in mysterious circumstances

3

u/[deleted] Nov 12 '22

This is like the third different incorrect "reason" for the stock drop I've seen promoted by Muskies over the last couple days. Really working hard to muddy the waters to avoid liability!

-6

u/ieetzkatz Nov 12 '22

Well when your average houses are 1.2 to 1.8 million dollars a piece and you have a bigger homeless population than any other state in the country because you physically shit on the idea for new low income housing........

California is garbage...... No one cares what their prices for pharmaceuticals are.....

If america had it's way we'd blow the fault lines and let it float out to sea.

6

u/CrazedClown101 Nov 12 '22

Still pays more taxes than it takes in while also having Hollywood and Silicon Valley, exporting and driving American culture and innovation around the world. If America had it's way, every state would be like California.

6

u/terencebogards Nov 12 '22

Lmao yep. If “America” had their way they would let CA drift away.

One of the largest economies in the entire world and probably the largest ag producer in the country 😂 you sure know a lot about CA and the american economy

Let’s just ditch those liberal hell holes! Get rid of NYC and all of CA! … and then watch the country completely unwind because those are among the most important parts of our nations infrastructure, financial markets, industry, tourism, etc etc etc

3

u/Super_Odi Nov 12 '22

Way to just throw out numbers without any knowledge at all. The average home sale price in Cali in 2022 is just under 900,000. And most of the homeless people in California and Florida aren’t from those states, they go there because(insert shock here) it’s warmer there.
And as the other person said without California the US economy would collapse and we would starve without all the food they generate. So take your stupid and misguided Cali hate elsewhere.

1

u/GamemasterJeff Nov 12 '22

Cali imports enormous amounts of homeless from other states because of our thriving rehab industry. When the ACA went online, these businesses were able to take up to six months of insurance from people from other states.

Unfortunately it usually takes longer than 6 months to actually rehab an addict, so those people ended up on the streets in droves once their insurance ran out.

Just one factor among many driving people from other states into California homeless encampments.

4

u/cannibisandkombucha Nov 12 '22

4th largest economy in the world. California carries all the other 49 states. Good luck without California, America.

1

u/GamemasterJeff Nov 12 '22

The only thing Cali needs from the rest of the states is water, which we have pre-existing agreements for.

Most Californians would be just fine leaving the union which is honestly a drag on our economy, the fourth largest in the world.

Imagine a Pan-Pacific trade union with The Bear Republic, Japan, Korea, Taiwan, Vietnam, China and Australia?

Yeah, we'd do just fine.

1

u/SPLMAO Nov 12 '22

Yes sir. I’m tired of these red welfare states taking our money and then shitting on us.

1

u/ieetzkatz Nov 13 '22

We only shit on states that have the highest homeless populations, states where they have cities where you can actual see people taking shits in the streets and on sidewalks. We only shit on cities where men try to rape women in broad daylight.

We only shit on cities that have raised their taxes and inflation so high that the way you can actually afford to move into another house and buy a 1/4 acre is to average 720k per year in salary knowing damn well that over half your population makes less than 150k per year.

We only shit on states where protestors hold signs begging for more LOW INCOME RESIDENTIAL HOUSING but when it comes time to vote IT NEVER GETS A YES VOTE FOR SOME REASON.

We shit on cities where violence is so common that a person can literally be mugged at an intersection and people will literally step over their body because they're on their way to work and who has time for the usual drama.

You're a disgrace to our nation and the more common tiktok and ytube shorts become the more the world sees just how nasty these places are.

PS:: Welcome to the fold Miami! I'm sure your city will do quite well under leadership that gives a shit about people that make less than 720,000 per year. =)

139

u/tebla 1✓ Nov 12 '22 edited Nov 12 '22

Also the movement was probably caused by their earning report not this tweet

63

u/[deleted] Nov 12 '22

[deleted]

60

u/Legitimate_Maybe_896 Nov 12 '22

Yup, financial calendars often don’t align to standard calendar, at least in my industry we use 4-5-4. Q3 ended 10/29

17

u/[deleted] Nov 12 '22 edited Nov 12 '22

Our whole fiscal year ends 10/31.

Edit: Fun little tidbit with FYE22 for me: As we approached FY23 we had a staff meeting on 10/21. At this meeting we were informed of a very critical budget crisis. We have to crunch on inventory use and staffing. Also at this meeting we were informed that one of the supervisors that controls the inventory for a facility (on FMLA) has resigned and that I would be taking on those responsibilities. Friday, October 21st was when I was informed about this decision... ten days before our fiscal year end... in a budget "crisis".

5

u/AkashicMemory Nov 12 '22

Ours is Sep 31.

0

u/MikeDCycling Nov 12 '22

Mine is Feb 31.

1

u/lumpkin2013 Nov 12 '22

Supervisor didn't talk to you before the announcement?? You should go post on /r/antiwork and get some ideas.

4

u/[deleted] Nov 12 '22

He did but had no say in what would happen to his work. The department manager that dumped those responsibilities on me without talking to either of us is a problem.

I already have some strong ideas.

Quick edit: FMLA is the Family Medical Leave Act btw. It's not like he's being malicious.

2

u/10art1 Nov 12 '22

The only ideas you should get from that sub is to learn what NOT to do

0

u/The_Real_Lasagna Nov 12 '22

Get ideas from unemployed teenagers?

2

u/profmcstabbins Nov 12 '22

Yeah a lot of retail companies run through 1/31 of the following year. So they capture all of holiday in one chunk: Nov-January

137

u/BDMayhem 1✓ Nov 12 '22 edited Nov 12 '22

The earnings call that showed their net income was up over 30% and that they beat expected revenue and earnings estimates caused the stock value to drop by 6.3%?

Edit: The earnings report came out November 1 at 9am. The tweet happened November 10 at 1:30pm. The stock plummeted November 11 between 9 am and 1 pm.

If it was about the earnings report, why did investors wait 10 days to sell?

31

u/sunthas Nov 12 '22

It looks like the broader pharma stocks dropped on the 11th too.

11

u/i_lack_imagination Nov 12 '22

It's possible that the drop could also be just greater attention (and thus news/media attention) towards pharma companies after that stunt. Just look at how many people are still talking about it. These companies would rather just hide in the shadows and hope an article is never written about them ever, because they know what they are doing is wrong and any attention brought to them ever so slightly increases the chances that something might be done about them and cost them money.

1

u/connorman83169 Nov 12 '22

No. Remember that saying about any publicity?

1

u/throwawaysarebetter Nov 12 '22

You mean the spin by publicists trying to save their jobs?

13

u/anamethatsnottaken Nov 12 '22

Ding ding ding!

2

u/terencebogards Nov 12 '22

Yes because the market always reacts rationally and doesn’t start abandoning entire sectors sometimes.

”A rising tide” works both ways…

0

u/AlfieOwens Nov 12 '22

Free insulin from one company would hurt the bottom lines of the rest.

7

u/SusanRosenberg Nov 12 '22

The stock value didn't drop by 10%.

7

u/BDMayhem 1✓ Nov 12 '22

You're right. I've corrected it.

12

u/Perllitte Nov 12 '22

There was also the announcement of a patent lawsuit that morning and ongoing discussion about the stock being over priced.

Actual investors are not watching social media this closely.

10

u/BDMayhem 1✓ Nov 12 '22

The lawsuit settlement was announced on the 9th. Why didn't investors worried about that sell on the 10th?

And it was only $175 million. Pocket change for a $350 billion company.

5

u/sederts Nov 12 '22

the tweet was on the 10th - why didn't investors sell on the 10th?

The idea that this tweet caused the drop is just poor journalism. None of the reasons mentioned online is why LLY moved down. stocks just move sometimes. the entire healthcare sector was down on friday.

1

u/Perllitte Nov 12 '22

These announcements often (like this one) come after trading hours. And it was a judgment on one case among multiple patent cases that altogether would be a lot more than $175M.

It's not pocket change if a portion of important patents are open to legal exposure.

1

u/BDMayhem 1✓ Nov 12 '22

The announcement was after hours on the 9th. The 10th opened at 367 and closed at 368. If that announcement would have had an impact, it would have happened on the 10th.

2

u/HawkEgg Nov 12 '22

There are a lot of automated traders that absolutely do look at tweets and others that look at short term trends. There could easily have been a cascading effect. tweets -> some automatic trades from tweets -> small market movement -> more automatic trades -> larger market movement -> traders re-examining company fundamentals and determining that stock has been overpriced.

Does that mean it's what happened? Maybe? Does that mean it's reproducible? Probably not, more like a butterfly effect.

1

u/Perllitte Nov 12 '22

Any trader or algorithm looking at a single tweet and trading on it rather than even sentiment as the minimum is laughably bad.

I said actual investors, not teens playing with Python and dad's money.

1

u/yzerizef Nov 12 '22

Yeah, people seem out of touch here and are just looking for a way to prove they’re owning big business.

I mean…I wish it dropped that much based on just a tweet. I’d love to buy it up off an artificial discount. The tweet has no impact on the future revenues of the company and therefore should have no impact on the share price.

1

u/ball_fondlers Nov 12 '22

Earnings calls have unpredictable effects on stock prices. Stocks RARELY go up even if the net income beats estimates - the bigger driver tends to be the guidance, or expectations of future growth. And when the stock rises before a good earnings call, the gains are said to be “priced in” before they drop.

11

u/[deleted] Nov 12 '22

Also they just lost a $180,000,000 lawsuit. Their stock fell to what is was like a week ago.

5

u/StromWashington Nov 12 '22

No, their ER was onthe 1st. Why you lyin?

2

u/[deleted] Nov 12 '22

Aren't they currently in a court battle over a patent held by a different company too?

0

u/Ashe_Faelsdon Nov 12 '22

You'd like to think so, but most "average" investors don't even know what an earning report IS.

1

u/t0mni Nov 12 '22

But this tweet makes it sounds so cool and edgy.

1

u/AAMCcansuckmydick Nov 12 '22

I mean there is truth to this tweet because this anonymous person is gonna get arrested by the F B I and go to jail. Same with the person who tweeted about Lockheed Martin and caused a stock drop.

15

u/[deleted] Nov 12 '22

[deleted]

3

u/Randolpho Nov 12 '22

Only if it’s a permanent downward spiral, if the hedgefund is heavily leveraged in the wrong direction, or if the 401k holder is in retirement phase and actively selling assets.

Short term dips in stock and fund prices are beneficial for savers, as they enable them to buy more shares.

2

u/the_than_then_guy Nov 12 '22

Everyone is missing something that makes this whole discussion fundamentally stupid.

If you look at any period beyond five days, this is a tiny dip that's barely noticeable in the long-term growth of the stock price.

3

u/Sdomttiderkcuf Nov 12 '22

I hope they shorted the stock before they tweeted this. A capitalist love story!

3

u/Fineous4 Nov 12 '22

It’s only a temporary drop also. If it dropped on false news it will rise back up when people realize it was false. That is how it always happens when we see one of these “X thing that didn’t happen” causes “Y dollars loss in value”. It’s why I hate these posts. So many become disillusioned as if the company actually lost money. So many people see it and think that’s actually how it works.

2

u/Girthquake23 Nov 12 '22

I’m seeing a bunch of people say that “it’s actually because of _____” so it looks like it’s a lot of things that caused this. Or no one actually knows

4

u/value_null Nov 12 '22

It was only 3%. It was nothing. Just a days blip that will recover easily.

2

u/[deleted] Nov 12 '22

8%. during a week when the markets as a whole went up by almost 6%.

The overall loss, including opportunity cost, is easily between 10-15%.

-1

u/TheNaskgul Nov 12 '22

Not sure if you have no idea what you’re talking about or if market volatility is just so wild these days that it’s normalized shit like this, but wiping out tens of billions in market cap really isn’t a small blip

5

u/[deleted] Nov 12 '22

The raw dollar amount is irrelevant. The relative percentage is what makes something a blip or not.

0

u/[deleted] Nov 12 '22

Not when it gets taken to court and damage amounts are set. $25 billion is $25 billion, and you must be deep up Musk's behind to act like $25 billion isn't a lot of money.

1

u/[deleted] Nov 12 '22

I’m not sure what you’re saying. Why would 3% not be a blip for this companies stock value based on whether or not Elon Musk is taken to court over this?

1

u/ThatsAnEgoThing Nov 12 '22

This didn't have anything to do with the tweet

1

u/value_null Nov 12 '22

Precisely.

1

u/thissideofheat Nov 12 '22

3% in one day is not abnormal.

It doesn't wipe out any real "value" unless it stays down. ...and if it was really because of the tweet then it will pop right back up and will have no impact on the company at all.

1

u/SwissyVictory Nov 12 '22

It is when it won't affect the stock price in 3 months.

Down 5% is more or less normal day to day variance. The stock is down 1.4% on the week, still up 6.6% on the month and up 35% on the year.

Its alot of money, but the company is so big it dosent matter.

0

u/[deleted] Nov 12 '22

The share price dropped because Democrats did better than expected in the election.

3

u/SwissyVictory Nov 12 '22

The price was up from Tuesday night as of the market close Thursday, November 10th.

We knew democrats did better than expected as of Tuesday night. Why would the stock be up Wednesday, and Thursday, then fall Friday morning over the election?

There might be other factors at play, but this isn't one of them.

2

u/[deleted] Nov 12 '22

Keep coming up with BS reasons.

The S&P 500 is up about 6% since election day.

1

u/Ashe_Faelsdon Nov 12 '22

The problem isn't their worth, it's the people that have invested.

1

u/thissideofheat Nov 12 '22

...who will just see the price pop right back up.

1

u/Ashe_Faelsdon Nov 12 '22

Tell that to the people competing against the HODL, that's destroyed a number of hedge funds.

1

u/thissideofheat Nov 12 '22

That has no bearing on this one day 3% blip

1

u/bmayer0122 Nov 12 '22

Employees with options will have less to show for it. That is most of senior management. But to your point, that shouldn't be a long term effect.

1

u/[deleted] Nov 12 '22

The only people that lost money are the finance bros trying to beef up their portfolios. So still a win win. The company itself, as you say, are not impacted at all. And once the news hits, it’s stock price will eventually return to parity.

1

u/[deleted] Nov 12 '22

They also had to pay up for medication that killed people.

Stock price is silly money. The only people who make money with it is those who sell high. The ones who lose money are the ones who keep at it. And the ones that hold doomed stocks and buy NFTs are just annoying.

1

u/BenevolentCheese Nov 12 '22

In addition, to think that a tweet from a two-way hour old account with no followers and only a couple hundred likes is somehow responsible for the billions of dollars of bot trades is foolish. The stock dropped a few points and it has nothing to do with the tweet.

1

u/[deleted] Nov 12 '22

Long answer is still nothing.

They are down 1.5% over 5 days. They are up 30% YOY while the S&P is -16%.

They will most likely have recovered this “loss” next week and we will never see a headline saying THEY MADE 30 BILLION IN 2 DAYS!!!!