Investor's Corner
Tesla becomes 3rd most-shorted stock behind AMZN, AAPL as Q3 rush begins
Tesla (NASDAQ:TSLA) recently lost its place as the No.1 most shorted company in the US stock market, giving away the position to Amazon. Even more recently, Apple also overtook Tesla in the US market’s rankings for most-shorted companies, making the electric car maker as the 3rd most-shorted stock in the US market as of writing.
The updates to Tesla’s short interest was posted yesterday by S3 Partners LLC Managing Director of Predictive Analytics Ihor Dusaniwsky, who shared Tesla’s latest stats on Twitter. Dusaniwsky noted that Tesla’s short interest currently stands at $9.6 billion, which corresponds to 31.83 million shares, or 24.96% of the company’s float. The S3 Managing Director also noted that Tesla shorts are currently up $1.68 billion since Elon Musk announced his intentions to take the company private last month.
$TSLA short interest $9.60 bn, 31.83 mm shares short, 24.96% of float. Shs shorted down 2.9mm since The Tweet.#tesla is now only the 3rd largest U.S. short behind $AMZN & $AAPL. Shorts are up $404mm in MTM profits today,up $1.68 billion since The Tweet & down only $27 million YTD pic.twitter.com/coB9E3pTtb
— Ihor Dusaniwsky🇺🇦 (@ihors3) September 4, 2018
Tesla’s latest stats on its short interest shows what appears to be a slight yet consistent decline in the number of TSLA shares that are held short. Just last week, for example, the S3 Partners executive noted that Tesla’s short interest stood at $9.83 billion, which translates to around 32.43 million shares, or 25.43% of the company’s float.
Back in May, there were 39 million TSLA shares that were held short — the highest in Tesla’s history. That being said, as Tesla started to find its footing with the production of the Model 3, the number of Tesla shares that are held short have seen a steady decline, dropping to 34.9 million shares at the end of July. Even amidst the controversy surrounding Elon Musk’s attempt to take Tesla private in August, Tesla’s short interest seems to have continued its slight decline, falling to 32.7 million shares by the middle of the month.
Tesla is currently attempting to hit its Model 3 production targets for the third quarter. After hitting its then-elusive goal of producing 5,000 Model 3 per week at the end of Q2 2018, Tesla is now looking to sustain and ramp the manufacturing of the electric sedan. This is highlighted in the company’s production target of building 50,000-55,000 Model 3 in Q3 2018. As of Friday last week, reports have claimed that Tesla had produced more than 34,700 Model 3 in the quarter so far. That’s less than 16,000 vehicles away from the lower end of the company’s Q3 target for the Model 3.
The final months of Tesla’s quarters usually correspond to unorthodox measures that the company adopts to meet its self-imposed targets. Back in Q1 2018, Tesla’s goal was only to build 2,500 Model 3 in a week — a feat that was almost achieved after a seven-day blitz that saw the company manufacture just over 2,000 of the electric cars in one week. In Q2 2018, Tesla adopted even more radical strategies to hit its goal of producing 5,000 Model 3 per week. Some of these strategies involved building GA4, an entirely new assembly line set up at the grounds of the Fremont factory, as well as air-freighting robots and equipment from Europe to the United States to quickly address production bottlenecks in Gigafactory 1.
With these in mind, it would not be surprising if Tesla initiates an aggressive push for the Model 3 and its operations this September. With less than four weeks to go before the end of Q3, and with the company actively trying to become profitable this quarter, the coming days would likely be very compelling.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla has scheduled its Earnings Call for Q4 and Full Year 2025 for next Wednesday, January 28, at 5:30 p.m. EST, and investors are already preparing to get some answers from executives regarding a wide variety of topics.
The company accepts several questions from retail investors through the platform Say, which then allows shareholders to vote on the best questions.
Tesla does not answer anything regarding future product releases, but they are willing to shed light on current timelines, progress of certain projects, and other plans.
There are five questions that range over a variety of topics, including SpaceX, Full Self-Driving, Robotaxi, and Optimus, which are currently in the lead to be asked and potentially answered by Elon Musk and other Tesla executives:
- You once said: Loyalty deserves loyalty. Will long-term Tesla shareholders still be prioritized if SpaceX does an IPO?
- Our Take – With a lot of speculation regarding an incoming SpaceX IPO, Tesla investors, especially long-term ones, should be able to benefit from an early opportunity to purchase shares. This has been discussed endlessly over the past year, and we must be getting close to it.
- When is FSD going to be 100% unsupervised?
- Our Take – Musk said today that this is essentially a solved problem, and it could be available in the U.S. by the end of this year.
- What is the current bottleneck to increase Robotaxi deployment & personal use unsupervised FSD? The safety/performance of the most recent models or people to monitor robots, robotaxis, in-car, or remotely? Or something else?
- Our Take – The bottleneck seems to be based on data, which Musk said Tesla needs 10 billion miles of data to achieve unsupervised FSD. Once that happens, regulatory issues will be what hold things up from moving forward.
- Regarding Optimus, could you share the current number of units deployed in Tesla factories and actively performing production tasks? What specific roles or operations are they handling, and how has their integration impacted factory efficiency or output?
- Our Take – Optimus is going to have a larger role in factories moving forward, and later this year, they will have larger responsibilities.
- Can you please tie purchased FSD to our owner accounts vs. locked to the car? This will help us enjoy it in any Tesla we drive/buy and reward us for hanging in so long, some of us since 2017.
- Our Take – This is a good one and should get us some additional information on the FSD transfer plans and Subscription-only model that Tesla will adopt soon.
Tesla will have its Earnings Call on Wednesday, January 28.
Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
Tesla makes big Full Self-Driving change to reflect future plans
Tesla Model S completes first ever FSD Cannonball Run with zero interventions
