Why Tesla Short Interest Remains Sky High

Print Email

Despite the fatality of a driver using the auto-driving mode in his car, and worries that Tesla Motors Inc. (NASDAQ: TSLA) will need to raise more money, Elon Musk has convinced some portion of Wall Street that his company is fine. Short interest in the stock was flat 26.2 million. The bad news is that shares short are a sky-high 23% of the float.

Tesla’s share price has rocked back and forth over the past year. In the most recent month it is down 12% to $198.

Musk said that Tesla has upgraded its self-driving feature. Broad skepticism remains about whether these systems are entirely safe, even if they are built by a large car company, or even Alphabet Inc. (NASDAQ: GOOGL), which has been working on a driverless car for year.

Musk has too many competitors, many experts believe. Ford Motor Co. (NYSE: F) released a statement that it will have a fully functional self-driving car by 2021. It can add itself to the list of almost every other car company with similar goals.

Another worry about Tesla is that by the time the Model 3 is launched, the market will be full of competitors. The new Chevy Bolt EV is one of those, and it will be in showrooms this fall.

Yet one more reason for worry is whether Musk will get his Gigafactory online on schedule. If not, the entire delivery plan for Tesla collapses.

Finally, Musk must convince Wall Street that his company can get ever more money to offset the cost of his future plans. That could be his highest hurdle.

I'm interested in the Newsletter