This week has brought investors the stock rally of a lifetime. There is no end in sight.
As of 8:40am EST, Tesla ($TSLA) stock traded at 901.62 per share, up $120.35 and 15.17% from yesterday's close; as compared to the S&P 500 Index, which closed yesterday at $3248.92, up 0.73% from yesterday's open.
Elon Musk admitted during the Q4 2019 financial earnings report that in Tesla's case, retail investors have frequently been more on point and accurate in regards to predictions and analytics. This week, however, even some of the most well-versed retail investors are stumped. Here's what's going on and what people are saying:
Yesterday, Tesla had a volume of 40 million shares traded. This is 98% more than the average trading volume for Tesla of 20.4 million shares. Both of these figures are several times more than the average trading volume from June/July of 2019, which was 2.1 million shares.
Total short interest for Tesla is currently hovering around 19 million shares. Interestingly, almost equal to the average volume. Total short interest represents a value of around $18 billion. Short interest is on a mild downtrend, down about 2 million shares in the past five trading days, and about 3 million shares in the past two weeks.
Tesla has gained nearly $250 per share in the past 24 hours alone. Institutional investors have long-since been stumped as to Tesla's peculiarity, but now even the most well-versed retail investors are also scratching their heads. One common theory is that EV buzz was generated in mass from the Superbowl this past Sunday. GM, Porsche, Honda, and several other auto manufacturers played ads for their up-and-coming electric vehicles, which may have played a role in the rally.
Another common theory is that Tesla has a new whale-sized investor. If this were the case, the investor would likely be based in Europe, China, or the middle east. This would explain the astronomic volume we saw yesterday.
Either way, this rally has made it difficult to overestimate Tesla. If the stock price can stabilize, the stock will easily see what will likely be the most exciting short squeeze of any of our lifetimes. It is important to note that a real squeeze hasn't truly started yet. Short interest took a hit, but if the stock can stabilize at these numbers, Tesla's short sellers will be in for a rough time.
Legal Disclaimer --
This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Christopher Larson, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
Christopher Larson is not a shareholder in Tesla, Inc., however currently (at the time of this article's publishing) holds options or securities in Tesla Inc. and/or its affiliates.
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