The former. And the fact that TSLA is not in the S&P 400, so institutions can't move shares from one fund to another. The market cap doesn't influence the mechanisms, it just makes the $ amounts involved larger.
Correct.
Correct.
I just posted
this in another thread, which may help further clarify things:
Another way to think of it is that an ice cream truck just sold 160M ice creams to 160M kids for $1,400 each. Now a school bus arrives with 50M (or more) kids who are so hot, sweaty, and hungry, that they MUST buy ice cream no matter what cost. The question now becomes at what price 50M out of those 160M kids are willing to sell their ice cream to the 50M additional kids that will buy at any cost.
Some kids will probably sell for $1,405, a bunch more for $1,450 and $1,500. But what matters is what price the 50Mth kid will sell his ice cream for. What is the ice cream worth to the kid with the 110,000,001st highest 'ice cream price target'.