Tesla, Inc. TSLA stock lagged behind the broader market recovery on Monday and slid below the psychological support of $200. As the lean stretch seen since mid-July continues, one bearish analyst thinks the stock could hurtle down toward his price target of $24.33.
What Happened: Tesla is the single greatest short in stock market history, going by the market capitalization lost, GLJ Research’s Gordon Johnson said in a post on X, formerly Twitter.
About 3.06% of Tesla’s float, which is the number of shares available for trading, are short bets, data provided by Yahoo Finance, citing Morningstar showed. Taking a short position is betting on the stock declining.
The average short interest for an S&P 500 stock is around 2.0, Barron’s said. The number of Tesla shares shorted as of Oct. 13 was 84.69 million compared to the company’s 2.72 billion float and 3.18 billion outstanding shares.
This is among the highest in the mega-cap space. Apple has a short percent of 0.60%, Meta 1.46%, Alphabet 0.81%, Microsoft 0.58%, Nvidia 1.10% and Amazon 1.02%,
Johnson also noted that the Model 3 revamp, named Project Highland, has not been selling well. A chart shared by the analyst showed that wait times for Tesla vehicles across geographies have declined significantly.
See Also: Everything You Need To Know About Tesla Stock
Why It’s Important: Tesla closed Monday’s session below the $200 level for the first time since May 26 amid investor skepticism over a fundamental recovery amid the uncertain economic environment.
CEO Elon Musk aggravated investor concerns by suggesting on the third-quarter earnings call that macroeconomic factors have been having a telling impact on fundamentals. The management did not offer any clarity on when the company’s core margin will inflect higher.
Future Fund’s Gary Black said chipmaker On Semiconductor, Inc.’s ON guidance miss may have led to some of the weakness in Tesla shares on Monday. ON, which sells silicon carbide chips to EV makers, alluded to increased risk for automotive demand due to the high-interest rates, he noted.
ON sells to automotive players with over 50% share of global EV sales, including four of the top five China EV makers, he added.
Black also noted that Panasonic Holdings Corporation PCRFY cut its domestic battery production, citing weak demand for Tesla Model S, and X EVs in the third quarter.
The fund manager, however, is optimistic about the global EV adoption reaccelerating in 2024.
Tesla settled Monday’s session down 4.79% at $197.36, according to Benzinga Pro data.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
