• Research

Apr 3, 2017

S3 BLACKLIGHT: Tesla Shorts Down Half a $ Billion today as Elon Musk Makes it Rain

Elon Musk tweeted “Stormy weather in Shortville…” today as Tesla Inc.’s (TSLA US) stock price is up over 5.5% to $293.83, or $15.53, in intraday trading. Tesla reported deliveries of 25,000 automobiles in the first quarter of 2017, a 69% increase from first quarter 2016 deliveries and more than half of the 40,697 sold in 2016.

Today’s announcement, coupled with Chinese internet behemoth Tencent Holdings’ (700 HK) recent purchase of a 5% stake in Tesla for $1.8 billion and the start of solar tile sales in April, paints a much rosier picture for Tesla’s revenue growth. With Tesla needing most of its $2.5 billion of cash on hand to finance research, development and production of the $35,000 Model 3, continued good news will make it much easier to float another $1 billion round of financing in mid-year.

Tesla short sellers are not too pleased with the recent flow of upbeat Tesla news as total short interest has risen to $8.9 billion, an increase of $1.64 billion, or 22%, for the year, but mark to market losses keep piling up. Short interest had actually dipped down to $5.5 billion in October 2016, but has risen consistently along with Tesla’s share price.  Short sellers were down $354 million, or 5.62%, in 2016, but are having a much worse year in 2017. Prior to today’s stock price spike short sellers were down $2.25 billion on an average short position of $8.3 billion for a return of -27.23%. However, today’s 5.5% price move added another $488 million to their losses. 2017 year to date P\L for TSLA short sellers is now $2.74 billion for a negative return of -33.15%.

Want deeper insight into the above analysis? Contact:
Ihor.Dusaniwsky@S3Partners.net
Head of Research, S3 Partners
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.


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