$420/share is not even visible in the rear-view mirror as Tesla Inc (TSLA) roars past $500/share and closes at $524,86/share. Tesla is now up over 25% in 2020 and up +193% since 2019 low of $178.97/share on June 3rd.
TSLA short interest is $12.79 billion; 26.74 million shares shorted; 19.99% of its float; and a 0.30% stock borrow fee. TSLA is the second largest short in the domestic market behind Apple Inc (APPL).
And the largest short in the worldwide Automotive Manufacturing Sector.
Tesla shares shorted have been declining ever since the stock hit its 2019 low stock price of $178.97/share on July 3rd. 16.95 million short shares, worth $8.1 billion, have been covered in just over seven months. TSLA short covering has continued in 2020, with 948 thousand shares bought back, but recently weâ€™ve seen some net short selling, with 818 thousand shares shorted over the last seven days.
TSLA short sellers did not have a profitable year in 2019, down -$2.89 billion in net-of-financing mark-to-market losses for the year. But in less than two weeks, theyâ€™ve nearly matched last yearâ€™s losses, down -$2.80 billion in net-of-financing mark-to-market losses, including -$1.25 billion in losses on todayâ€™s +9.77% price move.
With 2020 losses mounting, we should see a continuation and probably an acceleration of Teslaâ€™s multi-month short squeeze. Short sellers with lower P&L pain thresholds will be the first to cover along with shorts looking to call the top of Teslaâ€™s present rally. The long-term Tesla shorts with strong convictions will most certainly hang on the longest.
Todayâ€™s price move should produce enough short covering to threaten the four and a half year low of 24.2 million shares shorted on January 28th, 2019. The next low point would be 23.8 million shares shorted in July of 2015. If the long-term Tesla shorts begin to capitulate the 20 million shares shorted level of July 2013 would be the next milestone to fall.
Since 2016, when we started calculating short-side data, Tesla shorts are down -$11.44 billion in net-of-financing mark-to-market P\L. The recent rally may be the final tipping point for the mother of all short squeezes. If shorts begin to cover in size, expect the Tesla rally to get turbo charged to even higher levels.
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Managing Director Predictive Analytics, S3 Partners, LLC
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