Autos

Tesla Short Interest More Than Double at Peak Pandemic

Tesla Inc. (NASDAQ: TSLA) saw its short interest rise into the most recent settlement date, even as shares rallied. Note that the number of shares short was more than double that of a year ago, at the height of the COVID-19 pandemic.

Short sellers increased their positions in the two-week period ending on March 31 to 46.27 million. At the end of the previous period, 44.73 million shares were short.

A year ago, just 20.10 million Tesla shares were sold short. One contributing factor to the rise over the past year has been that Tesla has issued millions of shares in secondary offerings and even conducted a stock split. Furthermore, the stock has risen about 512% over the past 52 weeks.

Tesla stock currently has an average daily volume of 32.74 million shares, so it would take short sellers about a day and a half to cover their positions.

24/7 Wall St. recently reported on Tesla:

President Joe Biden’s $2 trillion American Jobs Plan, aka the infrastructure plan, includes more than just fixing crumbling roads and rusting bridges. Included in the $621 billion transportation infrastructure portion of the proposed legislation is $174 billion for electric vehicles (EVs), the largest single piece of that portion of the bill.

Morgan Stanley auto industry analyst Adam Jonas noticed. He also noticed that Tesla … stands to benefit the most of any EV maker from Biden’s proposed plan.

Jonas names a few of the problems that will emerge from the conversion to EVs. Current battery technology is among the most acute. The way EV batteries are made today uses large amounts of fresh water and other materials (e.g., cobalt) that are produced by unsustainable mining practices and in some cases child labor. There is no recycling infrastructure for exhausted EV batteries, nor is there reliable sourcing of key raw materials like lithium and some rare earth elements.

Tesla stock traded near $715 Tuesday morning. The 52-week trading range is $134.76 to $900.40, and the consensus price target is $651.26.