Elon Musk decided to rub more salt into Tesla short seller’s wounds by tweeting “They have about three weeks before their short position explodes”.
They have about three weeks before their short position explodes
— Elon Musk (@elonmusk) June 17, 2018
Why “Three Weeks”?
Because that’s when Tesla’s second quarter ends (April 2018 to June 2018) and Tesla will be reporting its second quarter production and delivery figures (first week of July).
The closer Tesla gets its Model 3 production to promised 5000 cars per week capacity, the harder the hit will be on Tesla shorts. If Tesla breaches the 5000 cars per week goal, then the shorts will be toast as the stock price will skyrocket.
What’s the big deal about “5000 cars per week”?
Production capacity of 5000 cars per week means Tesla will be building more than 21,000 cars in a month or more than 250,000 cars in a year.
At that level, Tesla will be in a position to exhaust its Model 3 order backlog in United States within a year, allowing them to concentrate on overseas deliveries.
There will always be questions around when and how Tesla will be raising more money to fund its operations. But 5000 Model 3s per week tells the world that Tesla has the capacity in place to hit high volumes and funding will be needed only for further expansion and not for ramping up Model 3 production.
It will be very interesting to see how much cash Tesla spent during the second quarter to hit its production goals. Even a billion on hand would make a huge difference moving forward.
Hope the shorts have hedged their bets.
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