A buying frenzy in electric vehicles stocks has Tesla Inc (NASDAQ: TSLA) shares up 62.1% and Nikola Corporation (NASDAQ: NKLA) shares up 60%since Nikola first began trading on June 4.
While EV investors are making a killing off the scramble for EV stocks, S3 Partners analyst Ihor Dusaniwsky said short squeezes could drive significant additional upside in both Tesla and Nikola.
Dusaniwsky saidTesla already appears to be in the middle of a short squeeze. Tesla has $19.1 billion in aggregate short interest, more than any other domestic U.S. stock. However, Teslas short interest is down by $2.3 billion in the past 30 days, suggesting some short sellers may finally be throwing in the towel after the stock gained 508% in the past year.
Nikolas short interest of $390 million is much smaller, but the two stocks have similar short percentages of float. Teslas short percent of float is 9.5%, while Nikolas is 7.6%.
Dusaniwsky said Tesla short sellers have endured $18 billion in mark-to-market losses year-to-date in 2020, with 43% of those losses coming in the past five weeks of trading. He said these heavy losses are the reason behind Teslas short squeeze, which is already in progress.
If Teslas stock price continues to trend upward, we expect even more short covering as mark-to-market losses accumulate, Dusaniwsky said.
The Nikola short squeeze has not yet begun at this point, but Dusaniwsky said skyrocketing borrow fees for the stock suggest a squeeze could be just around the corner.
Nikolas stock borrow fees have spiked to around 600%, and Nikola short sellers have paid $66 million in borrow fees in the month of July alone. At current borrow costs, Dusaniwsky said Nikola short sellers need the stock to drop 1.67% daily just to break even.
If NKLAs stock price appreciates, short sellers will be big losers on both sides of the short sale profitloss calculation unless NKLAs stock price trends downward a short squeeze is inevitable, he said.
Skyrocketing EV valuations have many analysts and traders as skeptical as ever about Tesla and Nikolas stock prices. However, given the market dynamics at play, both stocks make very risky short trades at this point.
It looks like electric and hydrogen car manufacturers are the silent short seller killers in the market today, Dusaniwsky said.
The average Wall Street analyst price targets for Tesla and Nikola are $722.26 and $46, implying 48.2% and 19% downside, respectively. Tesla shares have roughly doubled in the two months since CEO Elon Musk tweeted Tesla stock price is too high imo back on May 1.
Do you agree with this take? Emailfeedback@benzinga.comwith your thoughts.
Related Links:
Tesla Demonstrates Why Short Selling Is So Much More Dangerous Than Going Long
The Next Wirecard? 20 Things To Watch For To Spot A Massive Market Fraud
View More Analyst Ratings for TSLA View the Latest Analyst Ratings
2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
More here:
Analyst: Tesla And Nikola Are The 'Silent Short Seller Killers' - Benzinga
- TSLA Stock | TESLA Stock Price Today | Markets Insider - September 6th, 2018 [September 6th, 2018]
- Nikola Tesla | Biography, Facts, & Inventions | Britannica.com - October 8th, 2018 [October 8th, 2018]
- TSLA Stock Price - Tesla Inc. Stock Quote (U.S.: Nasdaq ... - October 8th, 2018 [October 8th, 2018]
- Tesla Model Prices, Photos, News, Reviews and Videos - Autoblog - April 20th, 2019 [April 20th, 2019]
- Ford, GM rev up electric pickup trucks to head off Tesla - Reuters - September 19th, 2019 [September 19th, 2019]
- Toyota using Tesla-style Panasonic batteries for China hybrids: sources - Reuters - September 19th, 2019 [September 19th, 2019]
- Teslas a Game Changer When It Comes to Windshield Wipers - Car and Driver - September 19th, 2019 [September 19th, 2019]
- General Motors vs. Tesla: Software Engineer Pay - Dice Insights - September 19th, 2019 [September 19th, 2019]
- Sweeney Gives Support to 'Tesla Lawsuit' - InsiderNJ - September 19th, 2019 [September 19th, 2019]
- Tesla Model 3 dominates global EV sales, chases down fossil fuel competitors - The Driven - September 19th, 2019 [September 19th, 2019]
- Driving A Tesla Model X Through Flood Waters May Look Cool But Isnt A Good Idea - Carscoops - September 19th, 2019 [September 19th, 2019]
- See This Tesla Model S Making Smoke? A Bug Is The Cause - InsideEVs - September 19th, 2019 [September 19th, 2019]
- Tesla Sentry Mode catches couple mistaking Model 3 for their Hyundai Elantra - Driving - September 19th, 2019 [September 19th, 2019]
- Tesla's Million Mile Battery - Seeking Alpha - September 19th, 2019 [September 19th, 2019]
- Podcast: Teslas upcoming new battery, Tesla Plaid Powertrain, EVs from Frankfurt, and more - Electrek - September 19th, 2019 [September 19th, 2019]
- Cuomo on whether Tesla will meet job targets: 'We will find out next year' - Buffalo News - September 19th, 2019 [September 19th, 2019]
- What the GM Strike Means For the Fremont Tesla Factory - California Globe - September 19th, 2019 [September 19th, 2019]
- Watch Tesla V10 with new Netflix, YouTube, Caraoke apps in action surprisingly refined - Electrek - September 19th, 2019 [September 19th, 2019]
- Sleeping With Tesla Autopilot May Explain Some Of Tesla's Safety Numbers - Forbes - September 19th, 2019 [September 19th, 2019]
- Tesla Autopilot V10 In-Depth Road Test With Useful Bookmarks - InsideEVs - September 19th, 2019 [September 19th, 2019]
- Why Tesla Seems to Be Struggling with Q3 Deliveries - Market Realist - September 19th, 2019 [September 19th, 2019]
- Tesla Alumni Launch Smart Electric Panel to Make It Easier to Go Solar - Tom's Guide - September 19th, 2019 [September 19th, 2019]
- A Tesla-Swapped E30 BMW Means 'You'll Never Miss a Yellow Light Again.' - The Drive - September 19th, 2019 [September 19th, 2019]
- Tesla Dealer Loophole Ideas - CleanTechnica - September 19th, 2019 [September 19th, 2019]
- Tesla vs. Porsche: Does The Model S Finally Have A Competitor In The Luxurious New Taycan? - Forbes - September 19th, 2019 [September 19th, 2019]
- How Musk is Trying to Address Tesla's Service Issues - Market Realist - September 19th, 2019 [September 19th, 2019]
- 3 Ways Tesla Is Transforming What It Means To Be A Car - CleanTechnica - September 19th, 2019 [September 19th, 2019]
- Ride Along In The World's Quickest Tesla - InsideEVs - October 1st, 2019 [October 1st, 2019]
- U.S. Labor Judge Rules That Tesla Interfered With Union Organizing - Jalopnik - October 1st, 2019 [October 1st, 2019]
- Tesla rolled out its Smart Summon feature, and it's not going well - Driving - October 1st, 2019 [October 1st, 2019]
- Tesla has reinvented the windshield wiper in new patent - Fox News - October 1st, 2019 [October 1st, 2019]
- Teslas first big V3 Supercharger expansion is already happening in Canada - The Verge - October 1st, 2019 [October 1st, 2019]
- People Are Posting Videos of Close Calls with Tesla's New Smart Summon Feature - Car and Driver - October 1st, 2019 [October 1st, 2019]
- People Are Trying to Get Themselves Run Over by Their Own Teslas - ScienceAlert - October 1st, 2019 [October 1st, 2019]
- Tesla Built-In Camera Captures the Moment 'Very Angry' Woman Keys Car in School Parking Lot - Newsweek - October 1st, 2019 [October 1st, 2019]
- In 10 years, Tesla went from a one-car company to a Porsche rival - Business Insider - October 1st, 2019 [October 1st, 2019]
- Tesla is working on its own more efficient seat with temperature-control system - Electrek - October 1st, 2019 [October 1st, 2019]
- Tesla Smart Summon isn't for use in public places, America - CNET - October 1st, 2019 [October 1st, 2019]
- More On Tesla's Plan To Make Its Own Batteries - InsideEVs - October 16th, 2019 [October 16th, 2019]
- Older Teslas are reportedly running into an issue where the screen stops working and the car wont charge - Business Insider - October 16th, 2019 [October 16th, 2019]
- Green Cab Ditches Hybrids In Favor Of Teslas For Its Taxi Fleet - CleanTechnica - October 16th, 2019 [October 16th, 2019]
- This Tesla Faced Keying And Break-In Attempt On The Same Day - InsideEVs - October 16th, 2019 [October 16th, 2019]
- What it's like to rent Tesla Model 3 on Turo car-sharing app - Business Insider - October 16th, 2019 [October 16th, 2019]
- Tesla offers peek inside the Crash Lab that helped it win a safety award - Digital Trends - October 16th, 2019 [October 16th, 2019]
- Tesla (TSLA) Expected to Beat Earnings Estimates: Can the Stock Move Higher? - Yahoo Finance - October 16th, 2019 [October 16th, 2019]
- Is Tesla Still a Rule Breaker to Believe In? - The Motley Fool - October 16th, 2019 [October 16th, 2019]
- California's Power Outage Demonstrates the Biggest Flaw With Tesla's Plan to Sell Everyone an Electric Car - Inc. - October 16th, 2019 [October 16th, 2019]
- Tesla Update May Have Lowered The Model 3's Range As Well - InsideEVs - October 16th, 2019 [October 16th, 2019]
- Here's how Tesla's cars stack up against the best of the competition from the world's top automakers - Business Insider - October 16th, 2019 [October 16th, 2019]
- Tesla: Why Demand Could Be a Concern - Market Realist - October 16th, 2019 [October 16th, 2019]
- Why Tesla Stock Looks Better Than You Think - Barron's - October 16th, 2019 [October 16th, 2019]
- Tesla navigating land mines that zapped rivals - Fox Business - October 16th, 2019 [October 16th, 2019]
- Elon Musk says monster Tesla seen on racetrack will go into production by summer 2020 - Mashable - October 16th, 2019 [October 16th, 2019]
- Tesla Roadster Gets The A-Team Treatment In Retro Face Car Renders - InsideEVs - November 1st, 2019 [November 1st, 2019]
- Tesla: Are the Bears Reaching to Make a Negative Case? - Market Realist - November 1st, 2019 [November 1st, 2019]
- Will FCA-PSA Buy Tesla Batteries And Drivetrain? - InsideEVs - November 1st, 2019 [November 1st, 2019]
- What Does The Tesla Model 3 Have In Common With A Cheap Toyota Etios? - InsideEVs - November 1st, 2019 [November 1st, 2019]
- Teslas Q3 profit is being scrutinized by analysts and some dont like what they see - MarketWatch - November 1st, 2019 [November 1st, 2019]
- Did Tesla release an unfinished Smart Summon just to pull an accounting trick? - Digital Trends - November 1st, 2019 [November 1st, 2019]
- What Drove Teslas Surprise Third Quarter Profit? - Forbes - November 1st, 2019 [November 1st, 2019]
- Tesla will roll out a software update that will make the Model S even faster - BGR - November 1st, 2019 [November 1st, 2019]
- Tesla Demonstrates The Power Of The Internet Of Things - Forbes - November 1st, 2019 [November 1st, 2019]
- Tesla Is The Underdog In The Electric Car Revolution - Forbes - November 1st, 2019 [November 1st, 2019]
- Tesla Model S Plaid Spied Testing Aggressive Body At The Nurburgring - Motor1.com - November 1st, 2019 [November 1st, 2019]
- Hill and Holmes' impeachment testimony, Netanyahu's indictment and Tesla's 'Cybertruck' reveal: The Morning Rundown - NBCNews.com - November 25th, 2019 [November 25th, 2019]
- If Tesla and Ford Motor are about to wage war for the electric-car crown, you wouldnt know it from this exchange - MarketWatch - November 25th, 2019 [November 25th, 2019]
- The Brutalist Tesla Cybertruck is designed to instill fear and draw the battle lines on internal combustion - Electrek - November 25th, 2019 [November 25th, 2019]
- As electric cars and Tesla make headlines, this CEO is betting on charging stations - Fox Business - November 25th, 2019 [November 25th, 2019]
- Teslas strategy is incredibly risky but it still makes lots of sense - MarketWatch - November 25th, 2019 [November 25th, 2019]
- Watch Tesla test Model 3 by making it drive into water - Electrek - November 25th, 2019 [November 25th, 2019]
- Teslas Cybertruck Will Face These Five Electric Pickups in 2021 - Forbes - November 25th, 2019 [November 25th, 2019]
- Elon Musk explains why Teslas Cybertruck windows smashed during presentation - The Verge - November 25th, 2019 [November 25th, 2019]
- A Physics Analysis of Tesla's Shattered Cybertruck Windows - WIRED - November 25th, 2019 [November 25th, 2019]
- Here's The Main Problem With Tesla's Supercharger Network - Jalopnik - December 7th, 2019 [December 7th, 2019]
- More Teslas on the Road Meant Hours-Long Supercharger Lines Over Thanksgiving - The Drive - December 7th, 2019 [December 7th, 2019]
- Woman Arrested as Suspected Tesla Driver Who Killed Father of 4 in Pico-Union Hit-and-Run - KTLA Los Angeles - December 7th, 2019 [December 7th, 2019]
- Woman Surrenders in Rented Tesla Hit-and-Run Crash That Killed Father of Four - NBC Southern California - December 7th, 2019 [December 7th, 2019]
- Why the Cybertruck is a breakthrough for Tesla and designer Franz von Holzhausen - Business Insider - December 7th, 2019 [December 7th, 2019]
- Tesla Cybertruck is almost $20,000 cheaper than Ford F-150 over 5 years - Electrek - December 7th, 2019 [December 7th, 2019]
- Here's how the million-mile battery could lead to Teslas lasting a lifetime - Business Insider - December 7th, 2019 [December 7th, 2019]