Johan
Ex got M3 in the divorce, waiting for EU Model Y!
My read is that this means that, despite all their FUD and BS, shorts are low conviction about their TSLA thesis. If they really believed their own BS, you wouldn’t see all this closing out of short positions. And with reduced short positions, the FUD lets up as well.
Agreed. I imagine that over time (multi year perspective) we will see continued peaks and valleys with regard to the valuation of TSLA, but over time the amplitude of these swings will be reduced, and the net move will be increasing valuation of course. With every such swing some shorts will exit, new shorts will enter, but the sum of it will be decreased short interest as time goes by. The high short activity in TSLA is a catalyst for bigger moves, both up and down (on the way up due to squeezing, on the way down due to (naked) shorting) and the big moves is an incentive to short and trade TSLA, so kind of a positive feed back loop. The way out of this loop is growth in the fundamentals over time. These are the ways I imagine the charts and numbers to go.
The narrative parallell to this is going from "Tesla will fail", "Tesla is a fraud" to (where we are today) "Tesla is an estabilshed auto maker but the future for EVs is uncertain", "Tesla is an estabilished company and will likely not go bancrupt, but is over valued" to eventually "Tesla is a tech behemoth with a bright future, huge piles of cash and huge positive cash flow" (think multiples of Apple) and at that point there will be just some haggling about the exact valuation (a "big move" will be up or down 5-10% in a month).
Also, with regard to short interest: It should be expected that when the value of TSLA drops >30% in a short period of time some (smart) shorts should be taking profit. What will really be interesting and telling is whether or not short interest again increases on the next leg up.
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