Tesla Inc (NASDAQ: TSLA) shares took another big hit on Friday and are now down 9.8%since the company reported second-quarter earnings on Wednesday. The sell-off has eased some pressure of a short squeeze in the stock that has endured throughout 2020, and some traders are speculating now may finally be the time to short Tesla stock.<\/p>\n
The Numbers: Prior to Teslas earnings report, short sellers had endured a $20.9 billion year-to-date mark-to-market loss in their aggregate positions, according to S3 Partners analyst Ihor Dusaniwsky. Teslas meteoric rise has forced a steady short squeeze throughout the year, triggering more than 13.8 billion shares worth of short covering year-to-date.<\/p>\n
TSLAs short covering has been relatively consistent throughout the year with only a 2 month stretch of time, in March and April, when short selling increased or remained flat, Dusniwsky said.<\/p>\n
However, even after the huge losses and mass exodus of short sellers, Dusaniwsky said Thursday that Tesla still has the single largest outstanding short position of any U.S. stock at around $19.9 billion in short interest.<\/p>\n
Kass Going Short: While other short sellers are throwing in the towel, Seabreeze Partners Management president Doug Kass said Thursdayhe initiated a short position in Tesla at $1,642 onafter waiting patiently for an opportunity to short the stock for years.<\/p>\n
Kass said Teslas potential inclusion in the S&P 500 is more than reflected in its recent share price.<\/p>\n
Tesla, with a market capitalization of over $300 billion, reached profitability by virtue of a heavy dose of regulatory credits, so it was a poor quality report, Kass said of this weeks earnings report.<\/p>\n
Kass said Tesla will be facingEV market competition in the years ahead, and the stock is finally easy enough to borrow that short sellers wont bleed to death paying fees.<\/p>\n
It is my view that Tesla will trade at $1,000\/share before it trades at $2,000\/share, Kass said.<\/p>\n
Benzingas Take: At this point, Kass call has been spot on with Tesla trading at around $1,432 on Friday. Tesla bears are hoping its S&P 500 eligibility continues to be a textbook example of a buy the rumor, sell the news trade.<\/p>\n
Related Links:<\/p>\n
What Are EV Regulatory Credits And Why Is Tesla Selling So Many Of Them? <\/p>\n
Tesla's Valuation Still 'Appears Overcharged' Following Q2 Earnings<\/p>\n
View More Analyst Ratings for TSLA View the Latest Analyst Ratings <\/p>\n
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Is Now The Time To Short Tesla's Stock? - Benzinga<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Tesla Inc (NASDAQ: TSLA) shares took another big hit on Friday and are now down 9.8%since the company reported second-quarter earnings on Wednesday. Continue reading