Short sellers certainly enjoyed the $1 billion made on the additional 15% drop of Tesla’s stock price in May. On the other hand, this company has to deal with numerous challenges.
Will Tesla Manage to Turn the Tables on the Stock Market?
For Elon Musk, the founder of “Tesla,” people who presume that stock prices will decline and hope to make a profit that way, also known as short-sellers, have always presented arch enemies. Judging by the most recent stock market analysis, nothing will change this month.
It seems that short-sellers have enjoyed a lucrative May so far, due to numerous challenges this electric car company faces such as plunging demand for their signature cars combined with overspending.
As data provided by S3 Analytics shows, Investors that assumed the company’s value on the stock market will drop have made over $1 billion in May. This made May one of the top-ranked months for short-sellers’ profit since 2016.
Tesla has been on a losing streak since 2016. This dire situation in the electric vehicles factory has made short-sellers richer for about $3.8 billion in 2019.
The fact that they are the second choice of short-sellers on the stock market, right behind Apple, proves just how serious the situation in this company is.
An expert in predictive analytics believes that Tesla’s stocks have to soar up to $300 if they want to put short-sellers out of the game and make an obvious threat of “short squeeze.”
Tesla delivered 63,000 vehicles during the first quarter, which was a far cry from their expectations of 76,000 cars delivered. If we convert this to money, the company lost $702 million during this period. This caused their shares to drop by an additional 15% in May and about 40% from the beginning of 2019.
The problems don’t end here for Tesla. The company has to deal with serious safety issues. One of their cars with an “Autopilot” system was involved in a disastrous crash according to the National Transportation Safety Board’s report.
Some ominous predictions are coming from Wall Street these days saying that Tesla stock price may plunge to $10 in future.