Electric vehicle leader Tesla Inc (TSLA) has been a popular stock to short by investors in recent months. According to a new report, Tesla remains one of the most crowded shorts in the market, although it lost its top position after three consecutive months.
The decline in Tesla’s first quarter financials and production and delivery figures falling below analysts’ estimates has raised concerns among investors. With declining deliveries and uncertainty about the company’s future direction, many are betting against Tesla’s success.
Hazeltree’s latest report ranks Tesla as the second most crowded stock for short selling among large-cap stocks, with a score of 97 out of a possible 99. Chevron Corp (CVX) claimed the top spot with a perfect score of 99, signaling growing interest in shorting oil stocks like Exxon Mobil Corporation (XOM), which ranked third with a score of 89.
In the mid-cap category, Dayforce Inc (DAY) and Confluent Inc (CFLT) received perfect 99 scores for a crowded short trade, while Foot Locker Inc (FL) led the small-cap category. Despite losing its perfect score, Tesla remains a popular target for short sellers, as highlighted by investor Danny Moses predicting a 70% drop in Tesla shares to $50.
DailyBubble’s perspective on the matter is that while Tesla has faced criticism and skepticism from short sellers for years, the company has continued to defy expectations and outperform the market. It is important to note that Tesla shares closed at $173.99 on Wednesday, with a year-to-date decline of 29.7%, while Chevron shares closed at $163.05 with a year-to-date increase of 9.0% in 2024.
In conclusion, the debate on shorting Tesla continues to divide investors, with some believing in the company’s potential for growth and innovation, while others remain skeptical about its long-term prospects. As the market dynamics evolve, it will be interesting to see how Tesla navigates these challenges and whether it can prove its critics wrong once again.