|Why Is TSLA Surging|
The controversy regarding the Telsa story is far from over. While the company is no longer at risk of running out of money, the debate around justified market cap continues, given the company is now worth more than Ford and GM combined. The timing of EV adoption, profitability, Elon Musk’s suitability as CEO, and competition continue to be relevant to the Tesla investing conversation. We were surprised to find recently reported trading data in the month of December that short interest only decreased from 15% to 14.3% as Tesla shares increased 17% from 12/13 to 12/31. In other words, contrary to our earlier belief, much of the move in December appears to be related to an increase in long shareholder positions vs short covering. This 14.3% short interest remains higher than typical tech stocks of 1-6%. Given the trajectory of today’s gains, it is likely that short covering is the primary factor in the move.
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