Tesla, Inc. (NASDAQ:TSLA) stock lagged behind the broader market recovery on Monday and slid below the psychological support of $200. As the lean stretch seen since mid-July continues, one bearish analyst thinks the stock could hurtle down toward his price target of $24.33.
What Happened: Tesla is the single greatest short in stock market history, going by the market capitalization lost, GLJ Research’s Gordon Johnson said in a post on X, formerly Twitter.
About 3.06% of Tesla’s float, which is the number of shares available for trading, are short bets, data provided by Yahoo Finance, citing Morningstar showed. Taking a short position is betting on the stock declining.
The average short interest for an S&P 500 stock is around 2.0, Barron’s said. The number of Tesla shares shorted as of Oct. 13 was 84.69 million compared to the company’s 2.72 billion float and 3.18 billion outstanding shares.
This is among the highest in the mega-cap space. Apple has a short percent of 0.60%, Meta 1.46%, Alphabet 0.81%, Microsoft 0.58%, Nvidia 1.10% and Amazon 1.02%,
Johnson also noted that the Model 3 revamp, named Project Highland, has not been selling well. A chart shared by the analyst showed that wait times for Tesla vehicles across geographies have declined significantly.
Two things: (1) $TSLA will go down, based on @GLJ_Research‘s published price target, as the single greatest short (based on mkt cap lost) in stock mkt history, & (2) the revamped 7yr old Model 3 (i.e., “Highland”) is NOT selling well (as GLJ predicted months ago). #thetruthhurts pic.twitter.com/vg0eTWOS82
— Gordon Johnson (@GordonJohnson19) October 30, 2023
Why It’s Important: Tesla closed Monday’s session below the $200 level for the first time since May 26 amid investor skepticism over a fundamental recovery amid the uncertain economic environment.
CEO Elon Musk aggravated investor concerns by suggesting on the third-quarter earnings call that macroeconomic factors have been having a telling impact on fundamentals. The management did not offer any clarity on when the company’s core margin will inflect higher.
Future Fund’s Gary Black said chipmaker On Semiconductor, Inc.’s (NASDAQ:ON) guidance miss may have led to some of the weakness in Tesla shares on Monday. ON, which sells silicon carbide chips to EV makers, alluded to increased risk for automotive demand due to the high-interest rates, he noted.
ON sells to automotive players with over 50% share of global EV sales, including four of the top five China EV makers, he added.
Black also noted that Panasonic Holdings Corporation (OTC:PCRFY) cut its domestic battery production, citing weak demand for Tesla Model S, and X EVs in the third quarter.
The fund manager, however, is optimistic about the global EV adoption reaccelerating in 2024.
Tesla settled Monday’s session down 4.79% at $197.36, according to Zenger News Pro data.
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