Is Tesla Stock Being Shorted?

Is Tesla Stock Being Shorted?

Tesla stock is down 46% YTD despite beating earnings estimates 7 quarters in a row and increasing revenue annually on a consistent basis.

Short sellers have targeted TSLA stock due to its elevated P/E ratio for a while now, which has caused Tesla shareholders a lot of frustration.

Is Tesla Stock Being Heavily Shorted?

According to Fintel, TSLA’s short interest is ~2.3% of the float or ~62,000,000 shares shorted. Many short sellers have bet against the entire EV industry as a whole after the massive 2021 stock market bull run.

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Tesla’s short interest is much lower than its competitors so it’s safe to say that Tesla isn’t being that heavily shorted.

Top EV Stocks by Short Interest

CompanyShort Interest (As of 11/2022)
Tesla2.3%
Rivian10%
Lucid Motors21%
Nio4.41%
Source: Fintel

Tesla is the only profitable EV company right now so it makes sense that short sellers wouldn’t target TSLA stock that much. Elon Musk believes Tesla will be worth more than Apple and Saudi Aramco combined in the future, which should deter short sellers from targeting Tesla as much moving forward.

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Tesla Stock May Short Squeeze But Don’t Expect a Massive Pump

The early days of massive Tesla bullish runs are over. Back in 2020, TSLA shares would often soar or crash on a daily basis. I remember almost turning a $500 TSLA call investment into $40,000 within 24 hours.

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Now, things have changed a lot ever since Tesla joined the S&P 500. The company performed 2 stock splits to reduce the share price, which caused the overall share outstanding to increase by a factor of 18.

Tesla has over 2 billion shares outstanding and now it’s extremely difficult to make a ton of money from a short squeeze. Whenever Tesla releases earnings, TSLA stock barely moves more than 10% after the earnings release.

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You could profit from a short squeeze but don’t expect any huge gains due to the high share count and reduced volatility.

Conclusion

Tesla has a low short interest and I expect that number to remain low in the future. The company is sitting on a pile of cash and could realistically become the most valuable company in the world by the end of this decade.

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