Tesla Shorts Are Still Holding On (For Now)

Tesla Inc TSLA shares gained 3% on Friday after the company reported better-than-expected fourth-quarter delivery numbers. The electric vehicle stock is now up 99% in just the past six months, but Tesla short sellers are seemingly still not convinced the rally will last.

The Numbers

Tesla reported 112,000 vehicle deliveries in the fourth quarter, beating consensus analyst estimates of 106,000 vehicles. For the full year, Tesla delivered 367,500 vehicles in 2019, up 50% from 2018. The 367,500 deliveries was on the low end of the company’s 2019 guidance range of between 360,000 and 400,000 deliveries.

On Friday, S3 Partners analyst Ihor Dusaniwsky said there are still 27.64 million shares of Tesla held short, a position worth about $11.89 billion. That short interest represents about 20.6% of Tesla’s float.

$TSLA short int is $11.89bn ; 27.64mm shs shorted; 20.65% of float; 0.30% borrow fee. Shs shorted down -920k shs, -3.2%, over last 30 days as price rose +28% & up +240k shs,+0.9%, last week. Shorts down -$2.92bn in 2019 mark-to-market losses; down -$330k in January 2020. pic.twitter.com/vHcZHJzP5P

— Ihor Dusaniwsky (@ihors3) January 3, 2020

Shorts React

Over the last 30 days, Dusaniwsky said Tesla’s short interest is down just 920,000 shares, or roughly 3.2%. Last week, however, Dusaniwsky said Tesla short sellers added 240,000 net shares to their positions ahead of the delivery number.

As a whole, Tesla short sellers endured net mark-to-market losses of $2.92 billion in 2019 and are already down about $330,000 so far in 2020, Dusaniwsky said.

For the time being, Dusaniwsky said he is not seeing evidence of a near-term short squeeze in Tesla, but that could change if the stock continues to rally.

“We are seeing some incremental short selling in Tesla recently, shorts are not diving back into the deep end, but are adjusting their positions on a daily basis,” he wrote.

Benzinga’s Take

Tesla has been an extremely volatile stock ever since going public in 2010. In the past year, the Tesla bulls have been on the winning side of the trade. The stock is up 44.2% overall, outpacing the S&P 500’s 29.2% gain and performing roughly in-line with the 49.6% gain by the Technology Select Sector SPDR Fund XLK in that time.

Tesla's stock traded around $444.40 per share at time of publication.

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Related Links:

Tesla Reports Record Q4 Deliveries

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