When do you think the "short squeeze" will happen?

[Discoducky]

When do you think the "short squeeze" will happen?

Short squeeze - Wikipedia, the free encyclopedia

Super wild a$$ guesses appreciated.

Also, what will be the catalyst? Blog post by GB saying that they are producing 40/day? Reservations exceeding 2013 planned production? New contract with a major automaker?

 

[jerry33]

My guess would be when the first profitable quarter exceeds guidance. That should put the fear of Elon into the shorts.

 

[Fr23shjive]

I voted Q2 2013 but it may not be till Q1 2014 when they report their first profit.

 

[DavidM]

I believe it will happen within 3 months after Tesla is producing 1,600 Model S per month, OR in the aftermath of Model S being named Car of the Year.
Seeing the Short Squeeze happen will give me almost as much pleasure as taking delivery of my Model S.

 

[CyberDutchie]

December is the next milestone for Tesla. Have they delivered 5,000 cars by then, we'll hear about it on the January earnings call. If they reach the 5,000 by end of December, they're at a production rate that guarantees profitability in 2013, with not much left for the shorts to bet against.

 

[joefee]

At year-end, if we hit 20K run rate for production with no "quality" issues.

 

[dmckinstry]

I said no opinion, but it's really that I don't have a clue. It would be nice if one happened by the end of this year, but I may have to accept the possibility of never. I say that because as each milestone is reached, the shorts may begin to see the handwriting on the wall and gradually ease themselves out of their short position. Of course, we can hope that they'll never recognize their mistake and "go down in flames."

 

[Johan]

I think many of us ar too optimistic that I'll happen soon. Remeber that the stock is already pretty high priced for losses of $1 per share. I mean even when we see profitability it's not gonna trigger a squeeze.

I think it will take a serious move/bid from a big player to aquire Tesla (or a large share) which Tesla in turn will resist/turn down (hopefully).

Slim chance this will happen before 2014.


Sent from my iPad using Tapatalk HD

 

[CapitalistOppressor]

If I was a smart short, I'd get a friendly analyst to downgrade the stock before earnings start to roll in and firm up the share price. Then I'd exit stage left during the resulting blood bath so as to limit my losses. After all, I was betting against the company being able to bring its product to market in the first place, and now that it has my prospects are starting to look decidedly poor.

 

[VolkerP]

There will always be fodder for shorting the stock. They can raise doubts:

- will Tesla deliver 5,000 in 2012
- will Tesla have no quality issues and no product recalls in 2012 or 2013
- will Tesla scale up its store & service operations fast enough
- will customers be happy with the cars
- will the batteries hold up (no timeline on that since it can be doubted for years to come)
- will sustained demand exceed Tesla's profitability threshold of 8,000 cars/y
- will Tesla be profitable for more than 2 quarters in sequence
- will Tesla be able to pay back the govt loan
- will economic turmoil put Tesla out of business
- will backlash from other market forces limit Tesla's growth
- will expiration of federal/state tax credits impact Tesla's sales

I could continue but am getting tired...

So I start to believe no news will ever trigger a short squeeze. Nope. The short positions will erode slowly over time of next year.

 

[brianman]

If I was a smart short, I'd get a friendly analyst to downgrade the stock before earnings start to roll in and firm up the share price. Then I'd exit stage left during the resulting blood bath so as to limit my losses. After all, I was betting against the company being able to bring its product to market in the first place, and now that it has my prospects are starting to look decidedly poor.

The challenge is proving it, but market manipulation comes to mind.

 

[zack]

The problem with shorting tsla is Elon Musk.

 

[Uncle Ron]

EDIT,,

 

[Citizen-T]

I voted never. I haven't taken a position on this yet, but at this point I think I am ready to do so. While I think that there will be many short-lived short squeezes over the next several years, I think that the mythical day-of-reckoning that people talk about on the investor threads here is just that, a myth.

I think that there are lots of different kinds of shorts playing with TSLA, no single event will make them all bail, just like no single event would make all the longs sell. Furthermore, just like when TSLA sells off hard, new buyers come in and take advantage of the fire-sale, when the stock price spikes (say, when a short squeeze starts) new shorts will jump on the higher prices by opening new short positions, and existing shorts will simply double down.

For this, and many other reasons, I think that what we will see is an orderly decline in the percentage of shares that are sold short as Tesla's success becomes more and more certain. There will certainly be spikes, squeezes, but nothing like people here are looking for.

Don't get me wrong, I hope that I'm wrong and that we see whole hedge funds go bankrupt because they shorted TSLA; but at this point, I think I know this stock well enough to take a position, and I'm going to say it doesn't go down that way.

 

[Norbert]

There will certainly be spikes, squeezes, but nothing like people here are looking for.

I'm not sure where you would draw the line between "squeeze" and "day-of reckoning". If there is any event that would make them bail, I'd think it would not be the event itself, but the stock going up significantly as a result of *other* (normal) people deciding to buy the stock on good news (which promise to be lasting). Then no short-seller wants to be the last to buy back, with more and more being forced to buy back when the prices reach the limit they can afford, and at that point things might escalate, or not, depending on the amount of counter-forces, which might be limited. How do you estimate the high point of escalation? Doesn't the high percentage of shorts indicate a potentially high point? Or, if there is no escalation, but the short-sellers gradually buy back over 6 months, aren't there so many shorts that the price might still go up significantly, especially if many stock owners become convinced that Tesla will be a long term success, and intend to keep the stock for many years?

 

[tander]

I think there will be a little bit a of a squeeze (but nothing as incredible as what some people have alluded to, even at $30 it's way over-valued for now) once they get production to speed and quality/reviews all get high marks. But also wouldn't be surprised if not longer after that there is a demand problem if existing orders start to run out and incoming ones are not fast enough, then it would swing the other way. If I was Musk I think I'd be kicking myself by now for doing the IPO so early, I bet he wishes he would have stayed private until they were through this phase.

 

[NuclearPowered]

I voted never. I haven't taken a position on this yet, but at this point I think I am ready to do so. While I think that there will be many short-lived short squeezes over the next several years, I think that the mythical day-of-reckoning that people talk about on the investor threads here is just that, a myth.

I think that there are lots of different kinds of shorts playing with TSLA, no single event will make them all bail, just like no single event would make all the longs sell. Furthermore, just like when TSLA sells off hard, new buyers come in and take advantage of the fire-sale, when the stock price spikes (say, when a short squeeze starts) new shorts will jump on the higher prices by opening new short positions, and existing shorts will simply double down.

For this, and many other reasons, I think that what we will see is an orderly decline in the percentage of shares that are sold short as Tesla's success becomes more and more certain. There will certainly be spikes, squeezes, but nothing like people here are looking for.

Don't get me wrong, I hope that I'm wrong and that we see whole hedge funds go bankrupt because they shorted TSLA; but at this point, I think I know this stock well enough to take a position, and I'm going to say it doesn't go down that way.

I concur with an identical vote.

 

[NigelM]

If I was Musk I think I'd be kicking myself by now for doing the IPO so early, I bet he wishes he would have stayed private until they were through this phase.

But then they wouldn't have had any capital......

 

[neroden]

There's some terminology confusion here. Actual short squeezes are very rare.

Remember, short sellers borrow stock and then sell it. They borrow from a stockbroker who borrows from a customer with a margin account.

In order to have an actual short squeeze, the short level has to be less than the number of shares of Tesla located in margin accounts (for instance, due to people with margin accounts converting them to cash accounts or pulling their shares out), so that it's simply impossible for the short sellers -- even the ones who really believe in short-selling TSLA and have unlimited bank accounts -- to "roll over" their share borrowing, and they HAVE to buy the shares back, at any price. That's what causes the massive run-ups in price during a short squeeze. Given that Elon has borrowed against large portions of his portfolio, I bet he has many of his shares in a margin account. So I think a short squeeze would be *hard* to engineer.

Short squeezes are made even less likely by the epidemic of illegal naked short selling (where they simply don't borrow the stock).

It's more likely that the short sellers will be driven out by increasing margin calls as the price goes up. That's not the same as an actual short squeeze. Hedge funds could go bust by shorting Tesla due to margin calls, and that wouldn't be a short squeeze.

 

[daniel]

I voted never. I haven't taken a position on this yet, but at this point I think I am ready to do so. While I think that there will be many short-lived short squeezes over the next several years, I think that the mythical day-of-reckoning that people talk about on the investor threads here is just that, a myth.

I think that there are lots of different kinds of shorts playing with TSLA, no single event will make them all bail, just like no single event would make all the longs sell. Furthermore, just like when TSLA sells off hard, new buyers come in and take advantage of the fire-sale, when the stock price spikes (say, when a short squeeze starts) new shorts will jump on the higher prices by opening new short positions, and existing shorts will simply double down.

For this, and many other reasons, I think that what we will see is an orderly decline in the percentage of shares that are sold short as Tesla's success becomes more and more certain. There will certainly be spikes, squeezes, but nothing like people here are looking for.

Don't get me wrong, I hope that I'm wrong and that we see whole hedge funds go bankrupt because they shorted TSLA; but at this point, I think I know this stock well enough to take a position, and I'm going to say it doesn't go down that way.

I can't vote in the poll because it's closed (the thread started while I was out of town) but I agree 100% with the above. The Great Short Squeeze supposedly approaching is a myth. There will not be One Big Revelation where the entire market suddenly realizes that Tesla is going to succeed, or a sudden turnover where over night it goes from deep in the red to enormous profit, and all the shorts scramble to cover. It will be gradual, and as Tesla grows and captures market share the short position will slowly decline.