Tesla shares dropped by over 6% yesterday following a tweet from an influential short-selling firm saying it has taken a short position on the EV firm’s stock. However, the stock partially recovered later and eventually closed down 2.91% at $186.35. Traders who take short positions believe the stock will drop in the near future.
Citron targets Tesla and its suppliers
The influential short-selling firm, in this case is Citron Research, which expects Tesla’s stock price to hit $100 by the end of this year.
Notes From Schwarzman, Sternlicht, Robert Smith, Mary Callahan Erdoes, Joseph Tsai And Much More From The 2020 Delivering Alpha Conference
The following are rough notes of Stephen Schwarzman, Steve Mnuchin, and Barry Sternlicht's interview from our coverage of the 2020 CNBC Institutional Investor Delivering Alpha Conference. We are posting much more over the next few hours stay tuned. Q2 2020 hedge fund letters, conferences and more One of the most influential investor conferences every year, Read More
“Citron shorting $TSLA Supply AND demand problems should take down to $100 by years [sic] end. News flow all around does not look good for stock,” the research firm tweeted.
Citron Research has also been targeting Tesla supplier Mobileye in recent months. Mobileye develops vision-based driver assistance systems. In September, the research firm issued a bearish note on Mobileye and recently called Mobileye the short of 2016. Citron referred to a Bloomberg article which claimed that Tesla may ditch Mobileye’s driver-assistance technology for the product designed by hacker George Hotz.
Though the focus of the articles was Hotz and the self-driving car he built in his garage, what grabbed attention was his comments about Mobileye and Tesla. Later the EV firm clarified that it will continue to use Mobileye’s technology in its cars.
Musk confident about the company’s prospects
Tesla’s share price has been on a downtrend in recent months. Last month, the stock dropped to a two-year low at $147.99. The drop started after several analysts lowered their price targets, expressing concerns about slow Model X production and dropping oil prices affecting electric vehicle sales. However, the stock soared after the delivery guidance for the Model X and Model S came in above analysts’ projections, and the EV firm is promising to turn to profit this year.
Since its inception in 2003, Tesla has faced quite a few challenges, but 2016 appears to be the most challenging one for the EV firm. Over time, the automaker has shown that it can make high-performing, technologically-advanced cars, but CEO Elon Musk has bigger visions than just being a boutique luxury electric car company. Musk is confident on his company’s prospects as he recently exercised his stock options by converting them into stock and reinvesting over $100 million into the company.