Tesla’s short interest is hovering around 38 – 40 million level since April this year, the highest we have seen in the last twelve months.
Between May 2017 and March 2018, Tesla short interest hovered around 30 million shares, but it spiked to +38 million in April. Either more people are shorting Tesla now or the shorts have doubled down on their bet.
At the time of writing this article, Tesla was trading around $284. The dollar amount of Tesla shares shorted is a bit more than $11 billion right now.
High short interest exerts lot of pressure on Tesla’s market capitalization, but one positive news can break the trend, landing a huge blow on the shorts.
“As Tesla’s short interest increases, there will be external forces putting the brakes on large moves on the short side,” said S3 Partners analyst Ihor Dusaniwsky. “Lack of stock loan supply, increased stock loan costs and tapped out risk limits will eventually curtail short-selling in Tesla.”
Weekly #Tesla short update. $TSLA short interest is $11.4 bn, 39.02 mm shares – down from $12.3 bn of short interest and 41.6 mm shares shorted in early May. Shorts are up $204 mm in daily mark-to-market profits as $TSLA stock price is down 1.8% today. Shorts are up $505 mm YTD. pic.twitter.com/x2kSpH6qr4
— Ihor Dusaniwsky (@ihors3) May 31, 2018
But Why?
Customer demand is still intact, Production capacity is rising fast, there is enough cash on hand to further ramp up production and also take care of current debt. But shorts are still busy. ?????
Source: S3 Partners, LLC
Now this where it gets really interesting. As Tesla increased production capacity, Tesla shorts are shorting the stock aggressively. Why would anyone in the right mind, increase their bet against a company that is increasing its production to meet high demand?
There is a lot riding for the shorts and that’s why it is not really surprising to see anti-Tesla articles flooding the internet. It’s now are never for the shorts and for the crowd that wants Elon to fail or should I say Model 3 to fail.
Oh and uh short burn of the century comin soon. Flamethrowers should arrive just in time.
— Elon Musk (@elonmusk) May 4, 2018
Expected arrival date: Within the next six months. My bet – second quarter earnings call.
Disclosure: I do not own TSLA shares, have no plans to initiate any positions within 72 hours and I am not paid by Tesla. This is not investment advice, just my thoughts.
It is extremely hard to find a balanced article on Tesla. So when I find one, I am going to share it with you. Here is one “Why so many people are so desperate for Tesla and Musk to fail ” – Giles Parkinson
