Institutions + Elon hold 93M + 29M = 122M shares, out of a total of 132M. That is just 10M for the rest. Wow.
Last reported number of shares short was 29 M. (Source nasdaq.com).
Hmmmm.
I am glad I am not among these 29M, at the mercy of the 122M combined shares held by Elon (who will not sell at any price) and these institutional share holders who (for a good part) are likely in for longer term as a strategic investment.
This is very good point. I am a fan of this metric as well and watching it with interest.
The situation is actually more ominous (for short sellers) that you pointed out. According to the
Proxy statement (p.46), as of 12/31/2015 and
NASDAQ data:
Outstanding Shares....................................131,424,866
Insiders (Exec. Officers & Directors)............-38,711,940
Institutional Shares.......................................-93,133,331
TMC members and other retail
(without accounting for shares sold short)......
-420,405
Yes, my math is correct - it is
NEGATIVE 420K shares. The trick is, as I learned about a year ago (thank you, jhm), is that as short sellers sell borrowed shares, the actual shares in circulation exceed outstanding shares by the quantity of shares sold short.
Nevertheless, the situation is explosive. I have to confess, that every time I see gloating self-important proclamation from the shorts and ideological Tesla critics (just to clarify - nothing to do with politics, just goof balls void of any connection with reality, endlessly repeating mindless juxtapositions with big established auto manufacturers), I have this vision of TSLA short squeeze wiping their wealth...
Anyhow, back on topic, this situation seems like a conflict of interest 101 to me. Just who is lending all these shares to the short sellers?? Right - the institutional holders that have big Brokerages - Fidelity and alike. According to the article about Fidelity inner dealings, posted couple of weeks ago there is SEC limit to how many shares a brokerage house allowed to lend for short selling - 70%. This rule is likely designed to put a limit on the ratio of shares in circulation to outstanding shares (1.7 max)
Additionally, brokerages must control their risk from insolvent short sellers. I am just speculating here (may be some professionals in the area can chime in), but the main tools of such risk control would be margin rules for short sellers and the interest charged for the shares borrowed for short selling.
Now to the gist of my thought on this: what prevents a large brokerage house to change margin requirements and interest charged to short sellers? In fact, as above negative 420K shares grow to negative MM of shares it seems to be their fiduciary duty to do so!
And this, IMO, is the huge factor that flies mostly under the radar - the short squeeze can be triggered seemingly independently from any big positive catalyst, just by change in margin requirements and interest is response to the reckless growth of short positions.
I will leave the rest to the imagination of the reader...