Will The Musk "Put" Work As Well As The Bernanke "Put"?

em>Joel Elconin is the co-host of

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Tesla Motors

shares are trading higher by $2.50 at $240.67 in Thursday's session. Earlier today the company announced a 500M common stock offering or 2.1M shares. On most occasions,when a company announces a stock offering it has a negative impact on an issuer's share price. The reason for this being,. the offering of more shares dilutes or reduces the value as each outstanding share will now represent a lower percentage of the current. Typically, offerings are executed at a discount to the current price in order to attract buying interest. However, the offering from Tesla came with one caveat. That being the Elon Musk has indicated "preliminary interest" in purchasing up to 83,974K shares of the offering. The move harkens back to the early days of QE1, when investors put faith "Bernanke put". In other words, it reduced the fear of investing in the market, since if the economy showed signs of weakening Bernanke would institute another round of QE, which he did on two more occasions. Thus, investors are shrugging off the normally dilutive effect of the offering and rallying the issue in today's session. After a higher open, Tesla rallied to $246.48 before reversing course and is now drifting toward the low for the session ($239.55) as shareholders reevaluate the true impact of the offering on the current share price. Also, a catalyst from the retreat from the intraday high may be the Wall Street's Heard On The Street column report: Tesla's New Deal:Fewer Cars, More Shares.