4 Short Sellers Explain Why They Target Tesla – But Don’t Try to Do this at Home

Jon Blogosphere, Market Commentary

The bloodletting among Tesla shorts has become legendary.
Tesla has been shorted for years by some very smart money betting the overvalued shares will tank any moment. At the end of March, short interest was 31.4 million shares. This short interest amounts to 26% of the ‘float,’ which is the number of shares available to trade (shares outstanding minus restricted stock). This is huge!
Yet, at $308 a share, the stock brushes up against its all-time high, giving Tesla a market capitalization of $50 billion, just shy of GM’s $51 billion. But they don’t even compare. In March, GM sold 63 times as many cars in the US as Tesla. Over the past eight years, GM earned $47.1 billion; Tesla lost $2.7 billion.
With this valuation, Tesla has been a logical short. But the bloodletting among Tesla shorts has become legendary. So the Los Angeles Times asked these four short sellers why they’d venture into this trade:
Mark Spiegel of Stanphyl Capital Management. David Rocker, formerly of Rocker Partners.

This post was published at Wolf Street by Wolf Richter ‘ Apr 24, 2017.