It’s been a tough week to bet against Elon Musk and Tesla (TSLA).
Tesla short sellers have lost more than $5 billion over the past five days, according to S3 Partners data, with the stock up nearly 40% since the company reported quarterly results after the bell. April 23.
Tesla stock rose about 15% on Monday alone after reports The electric vehicle maker has won approval to deploy full autonomous driving software in China. That extended gains from the previous week, when Musk promised a new low-cost vehicle and reassured investors Tesla could lead the way in autonomous ride-hailing.
The stock was down more than 40% for the year entering its first-quarter earnings report, as weak fourth-quarter results and lower-than-expected first-quarter vehicle deliveries weighed on earnings. fundamentals of Tesla.
That fueled bearish sentiment on Tesla on Wall Street as investors built up the third-largest short position of any U.S. company. Wedbush Securities Chief Executive Dan Ives, a longtime bull of the electric vehicle maker, in early April called Tesla’s position a “turning point.”
“We view this as a pivotal moment in Tesla’s history for Musk to turn things around and reverse the black eye’s first quarter performance,” Ives wrote on April 2. Tesla’s narrative term.”
The rally has occurred so far, penalizing short sales in the stock to the tune of a loss of nearly $3 billion on Monday’s trading day alone. Nonetheless, S3 Partners Managing Director Ihor Dusaniwsky noted that the recent rise in Tesla shares should not be classified as short selling.
In fact, according to Dusaniwsky, 2 million new shares were sold short during last week’s rally, and investors are still up $4.1 billion on their short positions against Tesla this year. This speaks to the divided stance Wall Street maintains on what happens next for the stock.
Tesla stock is rated buy by 23 analysts, hold by 24 and sell by 14.
Ives, for his part, has turned bullish again and maintains an Outperform rating and a $275 price target.
“Musk’s receipt of FSD approval in the key Chinese market is in our view a watershed moment in Tesla’s history,” Ives wrote in a note Monday.
But not everyone shares this feeling.
“We expect that Tesla shares may be saved in the near term from the effect of lower near-term earnings expectations, thanks to efforts to refocus attention on autonomous robo-taxis and the proclamation yesterday that some new product introductions previously planned for 2H25 would be accelerated in an effort to revive growth,” Ryan Brinkman, auto equity research analyst at JPMorgan, wrote after Tesla’s April 24 results.
“However, we do not believe that stocks can maintain their current still-high valuations in the long term as investors increasingly price in the implications of revised near-term expectations for long-term growth.”
