Citron Research Says Tesla Shares Are Doing 'Too Much Too Fast'

Tesla Inc TSLA has been one of the biggest market winners of the second half of 2019.

On Friday, Citron’s Andrew Left said the stock may run out of gas in the near future.

The short seller, who has taken both sides of the Tesla trade in recent years, said on Twitter Tesla’s 96.7% gain in the past six months is a bit unsettling.

Citron took A LOT of criticism for change of heart on $TSLA. Short interest now at all-time lows. Capitulation has created a "too much too fast" stock. Short term risk/reward now skewed to downside. Much respect to Musk but we are buyers 100 pts lower.

— Citron Research (@CitronResearch) December 27, 2019

Left Vs. Tesla

Tesla seems to have given Left fits for years. Left was a longtime Tesla short for more than two years leading up to a change of heart in October 2018. 

During that time, Tesla shares were up 74%. From the time Left turned bullish in October 2018 to April 2019, Tesla shares were down 20%.

In April, Left abandoned his bullish take on Tesla and said its cash burn and capital needs were too large of a concern for him to continue to take a bullish position in Tesla. Since he abandoned his bullish stance in April, Tesla shares are up 83.4%.

The good news for Left is that Tesla at least earned some money for charity in 2019 on his behalf: Left won a $10,000 charity bet with Tesla bear Whitney Tilson.

Tilson bet Left $10,000 that Tesla would not report a profitable quarter in 2019, but Tesla reported $143 million in net income in the third quarter.

Tesla shares were trading slightly positive at $431.09 at the time of publication Friday. 

Benzinga’s Take

Typically, a stock that nearly doubles in six months would seem to be extremely overbought, at least in the near-term. Yet Tesla’s big second-half run followed a brutal first half of 2019 for the stock. Even after its huge second-half gains, Tesla stock has simply performed in-line with the S&P 500 overall in 2019.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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Photo courtesy of Tesla.