Bad Day to Be a Tesla Hater

Tesla Tops $100 Billion Market Value, Short Squeeze Ensues

Kinsey Grant

The electric car company became the first publicly listed U.S. automaker to cross $100 billion in market value Francis Scialabba
Francis Scialabba

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.

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