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 stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
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