Tesla Motors Inc (NASDAQ:TSLA) is on a rise again today, climbing close to 5 percent at one point during the trading day on Monday. Investors are excited to hear about what the company has in store as CEO Elon Musk announced that the company had become profitable and that it was raising its guidance. Nonetheless, Seeking Alpha believes Tesla could be on the verge of a short squeeze.
At this point shares of Tesla Motors Inc (NASDAQ:TSLA) have climbed 41 percent to date, although they have flirted with $50 for two trading days now. Seeking Alpha contributor Forward Looking Guru speculates that this is because of retail investors who put stop limit orders into place. The online publication also speculated that new buyers were pushing shares of Tesla Motors higher in anticipation of the big news Musk said was coming on his Twitter account.
The contributor posed the short squeeze theory based on what happened involving Volkswagen AG (PINK:VLKAY) (PINK:VLKPY) (ETR:VOW)’s stock when it skyrocketed 500 percent in a single day. Short selling hedge funds moved to cover themselves when Porsche announced that it had amassed a huge stake in Volkswagen. When the short sellers moved, Volkswagen AG (PINK:VLKAY) (PINK:VLKPY) (ETR:VOW)’s stock price went through the roof.
It’s certainly possible that we could see something similar happen with Tesla Motors Inc (NASDAQ:TSLA). A lot of investors have been betting against it. In fact, it’s been lumped in with other recipients of fuel efficiency development loans from the Department of Energy frequently, but while most other recipients of those loans have failed, Tesla is now profitable and plans to pay off its loan early.
