Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If many shares in a stock are shorted "borrowed" and the share price goes up against them, the shorted shares may be forced to cover. That would result in the share price spiking higher.
I know of very few CEO's who comment on shorting because it's usually irrelevant to a healthy business. The price dropping or spiking is temporary. The very rare situations where CEO's do obsess over it are when their business depends on equity selling to keep afloat. In Musk's case, the obsession may stem from the fact that he has borrowed money against his shares which can force a margin call (the opposite of a short squeeze) that forces him to sell his shares if the stock price drops.
It's pretty stupid to get excited by a one day move in the stock price (either up or down). In any case, Tesla closed in the red today despite Musk's attempt to create a massive "short squeeze".
Last edited by sandlines; 05-08-2018 at 03:47 PM..
I did a little quick digging into CEOs who obsessed over short-selling. Like I said, it's very rare for execs to comment on it or any short term stock price for that matter. Attention to it just detracts from running a business which is what a CEO should be doing.
But Key Lay of Enron was notable for blaming short sellers. This is a times article from 2002: https://www.nytimes.com/2006/04/27/b...rtsellers.html. Ken could not take responsibility for his crimes but blamed short-selling for his companies failures.
Jeff Skilling likewise, blamed short-sellers.
Bernie Ebbers (of Worldcom) bought stock using money borrowed from his company to prop up the stock price. As the stock fell, he got a margin call forcing him to sell shares: https://www.wsj.com/articles/SB1013122141617625480
Aubrey Mclendon of Chesapeake, was another CEO who railed against short selling. He too would end up getting margin calls after trying to prop up the stock value by buying shares. He would end up losing his life by driving into a concrete embankment at high speed (some say intentionally).
I couldn't find any case where a CEO who railed against short-selling was vindicated in the long run.
This isn't to say short-selling is always right. I have invested in numerous companies that were heavily shorted. The difference was that they never mentioned the shorting or obsessed about it. If they had a solid business, the shorting never bothered them in the long run.
“A short squeeze is a situation in which a heavily shorted stock or commodity moves sharply higher, forcing more short sellers to close out their short positions and adding to the upward pressure on the stock.”
-investopedia
It basically propels the stock because people short are covering in a panic
Senior VP of Engineering Doug Field is "on leave" to spend more time with his family. Great timing right as they are trying to ramp up Model 3 production. Musk is burning through executives at an astonishing rate.
Earnest Villaneauva, Senior Manager of Battery Module Design (with Tesla since 2006)
Celina Mikolajczak, Senior Manager of Battery Tech (with Tesla since 2012)
Will McColl, Senior Manager of Equipment Engineering (with Tesla since 2011)
Jason Mendez, Senior Director of Manufacturing Engineering (with Tesla since 2005)
John McNeill, President of Global Sales (with Tesla since 2015)
Eric Branderiz, Chief Accounting Officer and Controller (with Tesla since 2016)
Susan Repo, Treasurer and VP of Finance (with Tesla since 2013)
Matthew Renna, Model S & X Program Manager (with Tesla since 2013)
Jim Keller, VP of Autopilot (with Tesla since 2016)
And now Doug Field, Senior VP of Engineering, "on leave"
In addition to high profile departures in 2017:
Jason Wheeler, CFO (with Tesla since 2015)
David Nister, Head of Autopilot (with Tesla since 2015)
Kurt Kelty, Senior Director of Battery Technology (with Tesla since 2006)
Chris Lattner, head of Autopilot software (only at Tesla for 6 months)
Diarmuid O'Connell, Head of Business Development (with Tesla since 2006)
If Tesla is on the cusp of great things, why are so many executives leaving? Why are so many of them finance and engineering leadership? Many of them were with Tesla since before the Model S. This should be a strong hint that there is something seriously wrong with the business side of this company.
Senior VP of Engineering Doug Field is "on leave" to spend more time with his family. Great timing right as they are trying to ramp up Model 3 production. Musk is burning through executives at an astonishing rate.
Earnest Villaneauva, Senior Manager of Battery Module Design (with Tesla since 2006)
Celina Mikolajczak, Senior Manager of Battery Tech (with Tesla since 2012)
Will McColl, Senior Manager of Equipment Engineering (with Tesla since 2011)
Jason Mendez, Senior Director of Manufacturing Engineering (with Tesla since 2005)
John McNeill, President of Global Sales (with Tesla since 2015)
Eric Branderiz, Chief Accounting Officer and Controller (with Tesla since 2016)
Susan Repo, Treasurer and VP of Finance (with Tesla since 2013)
Matthew Renna, Model S & X Program Manager (with Tesla since 2013)
Jim Keller, VP of Autopilot (with Tesla since 2016)
And now Doug Field, Senior VP of Engineering, "on leave"
In addition to high profile departures in 2017:
Jason Wheeler, CFO (with Tesla since 2015)
David Nister, Head of Autopilot (with Tesla since 2015)
Kurt Kelty, Senior Director of Battery Technology (with Tesla since 2006)
Chris Lattner, head of Autopilot software (only at Tesla for 6 months)
Diarmuid O'Connell, Head of Business Development (with Tesla since 2006)
If Tesla is on the cusp of great things, why are so many executives leaving? Why are so many of them finance and engineering leadership? Many of them were with Tesla since before the Model S. This should be a strong hint that there is something seriously wrong with the business side of this company.
Yep lol. Always watch what the big dogs are doing.
Despite another shot of testosterone administered yesterday by Tesla bull analysts, TSLA fell $4 yesterday to 301. The weight of TSLA short selling may be set to overwhelm TSLA bulls, who survive only by consuming immense amounts of Musk oil.
<<Even though Tesla remains one of the most shorted stocks in the U.S. equity market, analysts Romit Shah and Kellan Grenier believe the company could rally to $500 per share over two years, more than 60 percent from its current $303 price.
"We believe that over the next three to six months the narrative on the company will shift from insolvency risk and cash burn to market opportunity and growth," the analysts said. They have created a chart that sets out a path to an approximately "$100 billion valuation within two years" fr [sp.] the automaker.
Breaking down the analysts' bull case, Tesla would have to deliver 1 million autos with an average sale price of $60,000 over the next two years to reach the lofty goal. The analysts also forecast that Tesla could claim 10 percent of global luxury sales by 2022, saying the current top three brands (Mercedes-Benz, BMW and Audi) are "ripe for the picking.">>
This analysis requires TSLA to produce over 9,600 vehicles per week, up from the claimed 2,600 weekly level. Tesla currently aims to produce 5,000 vehicles per week by the end of June, with a further goal of 6,000 per week. Every week that production remains below 9,600/week, would require an eventual production rate of well over 10,000 per week in order to reach the goal of selling 1 million vehicles in the next two years. Note also that TSLA is shifting to 24/7 operations with another shift in order to meet its production goals, which raises issues of worker productivity and the maintenance of quality standards.
And issues of profitability and Musk micro-management raise to the fore, as disclosed in a Musk letter to employees quoted at the above link:
<<All capital or other expenditures above a million dollars, or where a set of related expenses may accumulate to a million dollars over the next 12 months, should be considered on hold until explicitly approved by me. If you are the manager responsible, please make sure you have a detailed, first principles understanding of the supplier quote, including every line item of parts & labor, before we meet.
I have been disappointed to discover how many contractor companies are interwoven throughout Tesla. Often, it is like a Russian nesting doll of contractor, subcontractor, sub-subcontractor, etc. before you finally find someone doing actual work. This means a lot of middle-managers adding cost but not doing anything obviously useful. Also, many contracts are essentially open time & materials, not fixed price and duration, which creates an incentive to turn molehills into mountains, as they never want to end the money train.>>
Cutting off contractors may disrupt Tesla production, and permanently alienate subcontractors if done in a slipshod way, which appears likely.
TSLA also would have to sell these vehicles, perhaps a challenge as its federal tax credit soon will be phased out, and as more significant competition enters the EV market and still able to offer the full $7,500/vehicle credit.
<<<<The $7,500 federal tax credit is a big inducement for consumers to buy electric vehicles and for automakers to develop electric vehicles. Once an automaker sells and delivers more than 200,000 electric vehicles (including plug-in hybrids with more than a 16 kWh battery pack) total, then the credit gets cut in half by the next fiscal quarter of sales.
Let’s say Tesla delivers its 200,000th unit in Q4 this year. Consumers would still get the full credit for vehicles delivered in 2019 Q1, but then for deliveries made in 2019 Q2 and Q3, the credit gets cut in half. Then it gets cut in half again for the next two quarters. So if production goes as planned, which is a phrase never uttered once about Tesla in its 15-year history, the federal tax credit for buying a Tesla will be nil by mid-2020....
The Model 3 is the best-selling EV so far in 2018, according to insideevs.com. As you may have heard, Tesla is ramping up production from a planned 2,500 week now (which it is falling short of by about 100 to 200 units) to 5,000 Model 3s per week by the end of 2018 Q2. Everyone except Elon Musk expects it won’t reach that goal, but consumers may be tired of waiting.
As of August 2017, which was the last time Tesla reported the number of Model 3 cancellations, about 63,000 people had canceled their order. If Congress doesn’t change the law, it is reasonable to expect more cancellations before the expected 2019 deliveries. Following Tesla and GM’s lead, every major automaker has a plug-in hybrid on the market, with imminent plans for fully electric vehicles. So there will be plenty of options for an EV for the masses with the full credit by 2019.>>
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
$500 price target?
