Tesla’s stock has been surging in recent months and its CEO, Elon Musk, has not shied away from taking swipes at short sellers. There are of course people who are pessimistic about Tesla’s stock and a report that was published on Investopedia confirmed that investors were holding short a total of $10 billion worth of Tesla shares. The company’s CEO took to Twitter to take a jab at the investors saying, “These guys want us to do so bad they can taste it.”
The tweet was referring to the short sellers. Musk added that based on current events, it could have been worse but things are looking up. It’s not the first time Musk has trivialized the considerable short activity that in the recent month has been dominant on Tesla’s stock. Back in April, the CEO tweeted “Stormy weather in Shortsville,” a tweet that was targeting directly short sellers in the wake of a massive surge of 30% in the company’s shares. Tesla’s stock also went up by another 7% to a new record high after it emerged that the company had reported a record number of deliveries during the first quarter.
The surge cost short sellers about $488 million in one single day and surprisingly, it was indeed an opportune time for Musk to take a jab. Tesla’s stock has, in some cases, been criticized for being overpriced. The long-term valuation strategy has been blamed for this but Elon Musk has been vocal in defending it. He tweeted at one time that if indeed investors were coming from trends of the past, then perhaps the argument of grossly overvalued stocks would hold, yet that was not the case. Musk added that Tesla’s stock price represented risk-adjusted future cash flows which according to him were looking very good.
Another tweet came in late on Thursday still dishing out jabs at the short sellers. Musk said, “Just wish they would stop sticking pins in Voodoo dolls for me. That hurts, okay?” For many short sellers holding on Tesla’s stock, there is no doubt they have their reasons. There are many analysts who would argue that wishing away this issue will not work and until the key concerns short sellers have are addressed, then perhaps Musk will have to tweet more to target these investors. In any case though, Tesla’s stock has been on the rise. At the time of writing this post, it was already at $370 per share.
The American auto company is looking to gain leverage on the increasing demand for its cars to improve cash flow and revenue streams over the coming years. But that is not all, the company is also venturing into the trucking market, a move that many analysts feel that will help diversify Tesla’s revenue streams. There was a time in the recent past when Tesla had surpassed both Ford and GM in terms of market capitalization and this basically underscores the value of the automaker. As for many short sellers, no doubt that Musk’s tweets won’t come as a surprise. However, it doesn’t seem like the trend is going away.