Tesla Stock’s Short Interest: TSLA Bears Still in a Coma

Tesla’s (TSLA) stock price rise has burned several short-sellers recently. After the company’s third-quarter earnings release, Tesla stock has risen 31%. Short-sellers have reportedly lost billions due to the Tesla stock surge. Let’s look at what may be in store for TSLA bears.

Tesla stock: Short interest changes in TSLA

Tesla stock’s short interest stood at 37.2 million shares before the company’s third-quarter earnings release. After the earnings announcement at the end of October, it dropped to 31.8 million. Furthermore, in mid-November, the short interest reduced to 30.6 million shares, almost 18% lower than since the earnings release.

The falling short interest in Tesla shows that positive sentiment toward the stock is increasing. The company’s earnings results, the beginning of its Gigafactory in China, the announcement of its Gigafactory in Germany, expansion plans, and the Cybertruck may be boosting sentiment. Short-sellers may this news could continue to support Tesla stock in the near future.

Tesla stock affected by positive earnings results

Tesla posted a non-GAAP profit of $342 million in the third quarter, whereas Wall Street analysts had expected a loss of $79 million. Additionally, in the second quarter, the company posted a non-GAAP loss of $198 million. The turnaround may have helped Tesla stock.

Tesla reported Q3 profits due to record deliveries and cost reductions. The company’s deliveries rose 2% sequentially to 97,186 vehicles. Its improved operating efficiency supported the company’s earnings.

However, after Tesla’s earnings announcement, there have been questions about its accounting policies. To learn more, read Tesla’s Accounting Policies: Another Controversy for TSLA.

China’s Gigafactory 3 production supports Tesla stock

Tesla has begun producing the Model 3 at its Gigafactory 3 in China. The factory was constructed in a record time of ten months. It also cost 65% less than its counterpart in the US. Tesla has big expectations from this factory, as it will compete in one of the world’s largest automobile markets.

The demand for mid-size luxury sedans is massive in China. Tesla’s Model 3, which will be locally produced, is set to be priced competitively, which could further spur demand for the company’s product in the country. Also, producing locally could protect the company against US-China trade tensions.

Germany’s Gigafactory 4

Tesla plans to produce the Model Y at its Gigafactory 4 in Germany, another part of the company’s plan to create local manufacturing footprints around the globe. Usually, domestic production helps a company save on shipping costs, import duties and tariffs, and logistics expenses. Plus, local production is less affected by geopolitical tensions.

Tesla is already in the process of installing equipment for the Model Y at its Fremont site. It expects the Model Y to hit the market next summer. The model is set to compete directly with Ford’s Mustang Mach-E, which will hit markets in late 2020. To learn more, read Can Ford’s Mustang Mach-E Be the Tesla Model Y Killer?

Tesla reveals Cybertruck

Tesla recently revealed its trapezoid-shaped Cybertruck, whose base model looks competitively priced. However, analysts weren’t all impressed by it. Tesla stock slumped after the truck’s release.

However, the company has bagged pre-orders for the truck. To learn more, read Ugly or Not, Tesla Cybertruck Got Almost 200,000 Orders. Overall, Tesla stock looks like it could continue to rise.