Tesla’s stock (TSLA) has increased to $ 2,000 a share prior to the stock split and the shorts are running out.
Earlier this month, Tesla announced a 5 for 1 stock split that sent the share price down.
Surprisingly, it has not stopped since that time.
TSLA is now up 40% since the announcement of the stock split without any other major catalyst happening in the meantime.
In comparison, Apple, which also announced a stock split two weeks before Tesla, has risen 20% since the announcement.
Tesla’s stock seems to be unstoppable for the last 3 months, again despite no major announcement:
One possible reason is a short squeeze with slow burn, as more short sellers give up on Tesla.
For a long time, Tesla has been one of the most short-lived stocks in the world, which means investors are betting on the price that comes down by borrowing shares and hoping to buy them back at a lower price.
Ihor Dusaniwsky, a short-interest expert, reported yesterday that shorts have raised more than 2 million shares in the last 30 days:
As you can see, there is a clear correlation between the number of shares short and the price of Tesla’s share.
At the time of this writing, Tesla’s stock was up 6% today to a new high of $ 1,993 per share – up from little to no news.
Tesla’s stock split is set to happen on Friday, August 28 – meaning TSLA shareholders will have 5 shares for every share they hold the following Monday, but the stock will trade at 1/5 of its value.
Electrek’s Take
It looks like a short soup to me.
Especially in August based on data from Ihor and it looks like they might not want any skin in the game during the stock split.
More importantly, I think they should stay away during Tesla’s battery day, but it can also end up being a classic “buy the rumor, sell the news” kind of event.
What do you think? Let us know in the comments section below.
Announcement: I’m long TSLA.
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