Tesla Posts Huge Short Interest, 27% of Float

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Short interest in Tesla Inc. (NASDAQ: TSLA) for the period ending March 31 totaled 31.35 million shares, up 0.9% from the 31.07 million shares short reported in the prior period. Nearly 27% of the company’s shares are short, even as it spars with General Motors Co. (NYSE: GM) to become the U.S.-based carmaker with the highest market cap.

Tesla has far outperformed the broad markets, with the stock up 63% since last December. Over the past 52 weeks, the stock is up 23.4%, compared with a gain of nearly 21% for the Nasdaq Composite and about 15% for the S&P 500.

The electric carmaker continues to defy typical market behavior. When it announced a $1 billion capital raise in mid-March, shares rose 2%. Virtually any other company would have seen its share price dip.

Tesla posted larger-than-expected net losses in the fourth quarter and in the 2016 fiscal year, even though fourth-quarter revenues were higher and new order totals rose sharply. At the same time, CEO Elon Musk said that the company was planning to invest $2.o billion to $2.5 billion in capital spending to prepare for production of the Model 3. With current assets totaling around $6.3 billion and current liabilities of about $5.8 billion, more cash was going to have to come from somewhere.

While more than a quarter of shares are short and some of Tesla’s recent share price gains are doubtless due to short covering, the fact is that no matter what happens on the ground, in the ether Tesla rises above the merely real. Shorts continue to believe that reality will eventually take hold, and they are sometimes rewarded. But it’s all timing and it’s not a game for the faint of heart.

Tesla stock closed down about 1.2% on Tuesday, at $308.71 in a 52-week range of $178.19 to $313.73. In the two-week short interest period to March 31, Tesla stock gained about 7.9%. GM recaptured the market-cap lead on Tuesday, with a value of $51.11 billion to Tesla’s $50.35 billion.