rolling short squeeze in 2013? I’d thought about this too in the past and came to view that as not explanatory.
Tesla had roughly 105 million shares outstanding at the time. The peak to trough of the short position in the $40s to $180 move in 2013 was about 28 million shares short to about 17 million short (still a massive short position vs market norms). No doubt there was some replacement of older shorts with newer shorts. That said, my understanding of a squeeze is forced covering by shorts begetting higher share prices begetting forced covering by shorts. There was buying and selling by shorts netting a drop of about 10-12 million shares of Tesla short over a couple of months. If you look at the price movement and volumes of Tesla in that $40-180 4 month run, a peak of 11 million or so net short shares falling off *was *not *a *driving *force. A “conveyor belt” as you put the replacement of old with new shorts, inherently is a neutral force, not a driving one. Now, as mentioned, there actually was some net short covering (ie, so more covering than a “conveyer belt”), which was of some assistance to the upward move, but Tesla essentially had the kind of move a biotech can have when its first real commercial product gets FDA approval. Hitting the 20K/year annual run rate and a profit in Q1 2013 (along with a couple of other validating events) was effectively like a binary event where the world realized this product, the Model S, made it to market in a way that would sustain and feed Tesla rather than bleed it of its funding (ie, like Fisker and its Karma just about at the same time).
