Tesla Tops $100 Billion Market Value, Short Squeeze Ensues
The electric car company became the first publicly listed U.S. automaker to cross $100 billion in market value, eclipsing the combined values of other homegrown heroes Ford and GM.
How Tesla doubled its share price in three months: 1) It reported a surprise Q3 profit 2) it topped annual delivery expectations and 3) its Shanghai factory is churning out Model 3s at a breakneck clip.
That’s good for…
CEO Elon Musk. If he can keep Tesla’s market cap above $100 billion for the foreseeable future, he’ll get a roughly $346 million payout.
That’s not good for…
Tesla short sellers, or investors betting against the company. The vocal #TSLAQ short community lost more than $2.8 billion in 2019, per S3 Partners. They’ve already lost about that much in 2020.
That’s a short squeeze. When a stock does what Tesla’s is doing (rocketing toward $600/share), short sellers are forced to give up their bearish bets and buy back shares to cut losses…which in turn pushes prices even higher.