KEEP OR SELL?

USING VARIOUS THEORIES TO EXPLAIN INVESTMENT DECISION MAKING BEHAVIORS ON TWITTER AND TESLA

Abstract

The case teaching relates the assumptions of different theories with investor decision-making, such as Agency Theory, Stewardship Theories, Stakeholders Theory, Contract Theory and Efficient Market Theory. So, a fictitious character was created, sir. Kusum, who becomes a shareholder of Tesla Motors Inc. and Twitter. Realizing that Musk’s attitudes affect investor behavior and, consequently, the price of shares, Mr. Kusum gathers information from the two companies to decide whether or not to continue with the investments. Faced with actual disclosures about the acquisition of Twitter, the case brings relevant information about the behavior of those involved to relate them to the Theories of Conflict of Interests. The case allows undergraduate and graduate students to discuss various theories that explain the behavior of market agents through a situation similar to reality, it also provides the expansion of students’ vision for a better understanding of the assumptions of the theories studied, applying them in a context that makes a direct link to recent events of Twitter’s buying speculation. In addition, it contributes with the visualization in practice of aspects of the theories employed in the case, also cooperates with teachers of undergraduate and graduate courses latu sensu and sctricto sensu in the disciplines of Theory of Accounting, Advanced Accounting, Theory Corporate Finance and Capital Market, enabling the use of a dynamic instrument that undertakes greater participation of pupils in teaching-learning.