Tesla Motors, Inc. (NASDAQ: TSLA) – Is Now the Time to Shorten Tesla Stocks?

Tesla Inc (NASDAQ: TSLA) The shares were another huge success on Friday and are now down 9.8% since the company reported second-quarter earnings on Wednesday. The sell-off has eased the pressure of a small stock restriction that has lasted through 2020, and some traders speculate that now may finally be the time to shorten Tesla’s stock.

The numbers: Prior to Tesla’s earnings report, short sellers had suffered a $ 20.9 billion loss to the market to date in their aggregate positions, according to S3 Partners analyst Ihor Dusaniwsky. Tesla’s meteoric rise has forced constant little pressure throughout the year, sparking more than 13.8 billion short-hedged shares so far this year.

“TSLA short coverage has been relatively consistent throughout the year with only a 2-month period, in March and April, when short sales increased or remained stable,” said Dusniwsky.

However, even after the huge losses and massive exodus of short sellers, Dusaniwsky said Thursday that Tesla still has the largest outstanding short position of any US stock with around $ 19.9 billion in short interest.

Kass falls short: While other short sellers are throwing in the towel, Seabreeze Partners Management President Doug Kass said Thursday that he started a short position in Tesla at $ 1,642 after patiently waiting for the opportunity to shorten stock for years.

Kass said Tesla’s possible inclusion in the S&P 500 is reflected more than in its recent stock price.

“Tesla, with a market capitalization of more than $ 300 billion, achieved profitability under a heavy dose of regulatory credits, making it a shoddy report,” Kass said of this week’s earnings report. .

Kass said Tesla will face competition in the electric vehicle market for years to come, and that the actions are finally easy enough to borrow that short sellers won’t bleed out by paying fees.

“In my opinion, Tesla will trade at $ 1,000 / share before it trades at $ 2,000 / share,” said Kass.

The taking of Benzinga: At this point, Kass’s call has been successful with Tesla trading at around $ 1,432 on Friday. Tesla Bears hope their eligibility for the S&P 500 will continue to be a textbook example of buying the rumor, selling the news trade.

Related links:

What are electric vehicle regulatory credits and why does Tesla sell so many of them?

Tesla’s valuation still “seems overloaded” after Q2 earnings