Tesla has a problem. Short sellers are piling into the stock despite CEO Elon Musk’s claims at a recent shareholder meeting that the electric vehicle maker could deliver a “record quarter at every level.”
Ihor Dusaniwsky, the managing director of financial analytics firm S3 Partners, points out that nearly 35% of Tesla stock’s float is short. The short float is worth a whopping $10.2 billion, more than a fourth of the company’s market capitalization.
But what’s surprising to see is that the short float has increased this month despite Tesla’s rally. So is there something that these short sellers know and we don’t?
Short sellers are unfazed by Tesla stock’s rally and Elon Musk’s claims
Tesla stock has shot up nearly 20% this month after struggling for the better part of the year. Elon Musk’s prediction that his company will be able to deliver “record” results this time seems to be driving investor enthusiasm.
But this claim hasn’t deterred short sellers from piling into Tesla stock. The number of Tesla shares shorted in the month of June has shot up 5.35%, according to S3 Partners.
This is not surprising as noise on Wall Street suggests that Tesla could miss its Q2 delivery target. The Elon Musk-led company believes that it can deliver between 90,000 and 100,000 vehicles in the second quarter.
But RBC Capital Markets estimates that Tesla’s second-quarter deliveries could wind up at 88,900 units. Goldman Sachs also carries a similar view, estimating that the EV giant could either meet or narrowly miss estimates.
Shaky analyst sentiment,