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Tesla’s Q1 Deliveries: Another Jolt for Short Sellers

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  • On Thursday, Tesla (NASDAQ:TSLA) reported its first-quarter deliveries. The company delivered a total of 88,400 electric cars in the quarter, which beat analysts’ estimates.
  • The stock outperformed the S&P 500 by a wide margin in the first quarter. Notably, the stock closed in the green, while the S&P 500 fell by almost 20% in the quarter. The stock was trading sharply higher in aftermarkets on Thursday after beating the first-quarter delivery estimates. The rise in Tesla’s stock price would have a negative impact on Tesla stock short sellers.
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Tesla’s Q1 deliveries

Tesla delivered a total of 88,400 electric cars in the first quarter. The deliveries include 12,200 Model S/X and 76,200 Model 3/Y. The company started delivering Model Y in the first quarter, which was ahead of the schedule. While TSLA and CEO Elon Musk missed several deadlines in the past, the company has delivered numerous commitments including deliveries and profitability during the past year. Tesla’s first-quarter deliveries fell on a year-over-year basis. However, the company experienced its best first quarter ever. Usually, the first quarter is seasonally weak for the company. The coronavirus added to the gloom. Overall, Tesla’s first-quarter delivery report looks encouraging. The company produced more than 100,000 electric cars in the first quarter.

Short sellers

The sharp rise in Tesla’s stock price between October 2019 and February 2020 hit short sellers hard. Short sellers gain when the stock price goes down. However, Tesla’s stock price more than doubled between January and February this year. David Einhorn of Greenlight Capital and Jim Chanos of Kynikos Associates are among the most well-known TSLA stock short sellers. There hasn’t been any recent news about whether Einhorn still holds his Tesla short position. Notably, several short sellers had to cover their position amid the sharp rise in TSLA’s stock price. However, Chanos revealed that he’s still short on TSLA stock.

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Jim Chanos “maximum short” on the stock

In an interview with CNBC on Thursday, Chanos said that he covered some Tesla short positions when the stock rose earlier this year. However, he added that he is currently “maximum short” on the stock. Meanwhile, the company released its first-quarter delivery number after the markets closed yesterday. The stock lost 5.6% in normal trading on Thursday and underperformed the S&P 500. However, the stock jumped sharply in aftermarket trade even though US stock market futures point to a weak opening today.

Tesla’s deliveries and earnings

In the interview, Chanos said that Tesla would lose money in 2020. Notably, the company hasn’t posted an annual profit ever. Chanos also pointed out that analysts are slashing Tesla’s 2021 earnings estimates. The coronavirus shouldn’t impact Tesla’s 2021 earnings. Over the last six months, the company has posted better-than-expected numbers. Tesla’s deliveries were better than expected in the fourth quarter. The company’s earnings in the third quarter of 2019 and the fourth quarter of 2019 were also higher than analysts’ expectations. TSLA’s better-than-expected first-quarter deliveries are another jolt for short sellers. Some of the short sellers expect the stock to fall to zero.

While TSLA stock is in the green this year, NIO (NYSE:NIO) is deep in the red. Read NIO Stock Still Faces Challenges, China Limps to Normalcy to learn more.

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