Batteries
Published on 21 August 2020 |
by Matt Pressman
21 August 2020 due to Matt Pressman
Originally posted on EV Annex.
Short sellers have been placing on Tesla stock for years. Have they finally reached their precedent? “Most large Tesla shorts do not lose sleep or lack of flour because of their positions,” said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners. Institutional investor. “They still think this will eventually go their way.”
 Anti-Tesla dealers try to put the brakes on Elon Musk (Source: EVANNEX) |
“It’s a picture of the perseverance of the short sellers who are left,” Dusaniwsky says. The extent of losses that short sellers have endured is “just absurd,” he says, compared to betting against other companies, with Tesla “by far the longest unprofitable short I’ve ever seen.”
If these short sellers are equal, then why is Tesla stock just reaching out for a whole lot of time, and going past $ 2,000 per share? Short seller Mark Spiegel attributes it to “this very gambling mentality that took place,” related to trading apps like Robinhood, “because people were sitting at home stabbing” during the pandemic with incentive checks to spend.
“It was almost anything but a brief squeeze that brought this thing up,” Spiegel says of Tesla’s share price increase. Dusaniwsky is not so sure. “The shorts are still tight,” he says. “Losses are going up and shorts are still covering.” Meanwhile, Tesla introduced itself to the S&P 500 inclusion and just announced a 5-for-1 stock split.
Back then, Wall Street banks warned the “bears” (those negative on TSLA) to be cautious. Barclays analysts, most skeptical of Tesla, acknowledged that they were “not clear on when momentum will break” and urged their “bearish friends” to stay in July “in the hiding place of their caves.
| A look at both the long-term investing thesis and short-term sellers around the Tesla stock (YouTube: Wall Street Journal) |
Many did not listen. Well-known shorts David Einhorn of Greenlight Capital and Jim Chanos of Kynikos Associates cling to their bets against Tesla. But why? Mirror of short seller is of the opinion that Tesla is just a cult stock. “I know that eventually enough people will leave the cult,” says Tesla’s Spiegel, “and the stock market will collapse.”
Spiegel is of the opinion (and has been for years) that competition is around the corner. Although, he readily acknowledges that many investors are unlikely to lose enthusiasm for Tesla until they begin to see electric cars made by Volvo, BMW, Mercedes-Benz or Audi en route.
Does Spiegel have it all figured out? Did the reverse happen? After all, Tesla’s electric cars pose a competitive threat to legacy gas-powered cars from traditional motorists. Could the ICE age of the auto industry have finally collapsed?
Professor Ferdinand Dudenhoeffer of the Center for Automotive Research (CAR) in Germany told Forbes that Tesla’s ‘enormous investment in new plants overshadows the established premium manufacturers’, even in the midst of ‘the Corona crisis’. In turn, he says, “Tesla is becoming a very serious competitor in the premium market. Its development compared to BMW, Audi and Mercedes is astonishing.”
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About the Author
Matt Pressman is all about Tesla. He is a TSLA investor, has pre-ordered the Model 3, and loves driving the Model S and Model X company cars. As co-founder of EVANNEX, a family business specializing in aftermarket Tesla accessories, he serves as a participant. / editor of Electric Vehicle University (EVU) and the Owning Model S and Getting Ready for Model 3 books. He writes about Tesla every day and you can follow his work on the EVANNEX blog.
