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Bloomberg: Squeezed Tesla Bears Buying $276 Million Hand Musk 146% Advance

Discussion in 'TSLA Investor Discussions' started by twinklejet, May 15, 2013.

  1. twinklejet

    twinklejet Member

    Mar 10, 2013
    May 15, 2013 04:00 AM GMT
    Bears blindsided by Tesla Motors Inc. (TSLA) have been forced to buy $276 million worth of the automaker’s shares, pushing the company toward the biggest rally in the Russell 1000 Index (RIY) this year.
    Tesla’s short interest, a measure of shares borrowed and sold on speculation they will fall, shrunk by 17 percent in the five days through May 13, after earnings that beat analyst forecastsand Consumer Reports gave the Model S sedan a top rating, data compiled by London-based Markit show. More than $3 billion in market value has been created as the stock jumped 50 percent to $83.24 since May 7.
    The gains illustrate what’s possible when negative sentiment builds in a company and management is able to avoid disappointment. Short interest in Tesla was 40 percent of available shares as recently as April 19, more than 11 times the average of companies in the Russell 1000. While bears say the news on Elon Musk’s company will one day turn sour, for those who bet against it, last week was a shock.
    “I’m watching this with amazement,” Mark Travis, chief executive officer of Jacksonville Beach, Florida-based Intrepid Capital Management Inc., which manages $1.4 billion and covered its Tesla short around $40, said in a phone interview. “I’ve had a very hard time being short here in the last six to nine months. There were a few things that worked but a lot that haven’t.”

    Stock Slips

    The stock retreated from its record high yesterday, declining 5.2 percent for the first drop in five days. The Palo Alto, California-based automaker has rallied 177 percent over the last 12 months, pushing its price to about 73 times analysts’ forecasts for its 2014 profit, compared with a multiple of 13.8 for the Russell 1000, according to data compiled by Bloomberg. The shares trade at more than 550 times projections for earnings this year, the data show.
    Shanna Hendriks, a spokeswoman for Tesla, said the company isn’t commenting on trading in the stock.
    About 19.7 million shares were sold short in Tesla as of May 13, or 17 percent of the company’s outstanding stock, according to Markit data. That’s down 4 million from May 7, the day before the automaker reported its first profit. Buying that many shares at the market’s average of $69.05 over the period would cost a total of $276 million.
    “That number is a fair approximation of the amount of short covering we’ve seen recently,” David Riehl, a New York-based research analyst with Markit, wrote in an e-mail. “Tesla has been a crowded short since its first day of trading. Like many recent IPOs, the supply of shares made available for borrow has been relatively scarce. This has kept the cost to borrow extremely high.”

    146 Percent

    Tesla’s stock is up 146 percent this year, (Continue reading on
  2. Doug_G

    Doug_G Lead Moderator

    Apr 2, 2010
    Ottawa, Canada
    What, exactly "worked"? FUD?
  3. Citizen-T

    Citizen-T Active Member

    Aug 25, 2011
    Raleigh, NC
    I'm sure he means that certain trades he made worked. At times he added to his short and caught a big drop. We've certainly had enough of those. I love that he covered at $40. This guy got lucky, which isn't saying much if he's been at it for 6-9 months.
  4. castigador55

    castigador55 Member

    Apr 29, 2013
    Money .. money ... money .. no, no, no ... The importance of these movements is the time ... Tesla motors need time to be the pivot to show that electric mobility is necessary and profitable. Elon companies have 3 axes (renewable energy, electric mobility and space travel) The success of the first two are essential to delay or prevent world wars for fossil fuels ... The third company will be essential in order to save a part of humanity if renewable energies fail to satisfy the appetite of power of humanity predatory natural resources. SpaceX To be successful and can colonize mars take long long time, but every day increases the rate at which the man consumes the resources of the planet and that time is getting shorter, Tesla motors inc CAN NOT FAIL ... TESLA name where it comes from?? Nikola Tesla said: "The scientific man does not aim at an immediate result. expected not their ideas are ready to be taken. Their work is like the sower for the future." Tesla Motors does not need investors who want to get Money Fast .. Tesla motors need investors to participate in a revolution that humanity needs ...
    The gains will come in a few years, after gen3 ... and will be very very very succulent.

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