Tesla stock (NASDAQ:TSLA) breached its record-high yesterday, bringing the company into an all-new frontier. TSLAQ were dealt a major blow with this latest rally in TSLA shares. This most recent burn might be one shorts can’t recover from because of the billion dollars of losses they could incur if they keep on their path.
TSLA shares closed at US$393.15 yesterday, US$10 more than its last highest record at the close, which was US$383.45 on June 19, 2017. The highest TSLA stocks had reached before yesterday was US$386.99, which was also recorded on the same day.
Some speculate that part of the rally in TSLA stocks was because Tesla seems to be pushing to make its Q4 earnings report even better than Q3 2019. The next-gen automaker is trying to fit in as many end-of-the-year Model 3 deliveries before 2020, which could affect Q4 results significantly.
Recently, @TslaCybertruck spotted three car carriers filled with Model 3 units for delivery. The sighting corroborates speculations that the all-electric sedan is already sold out for 2019 in the United States.
🚨Another Netherlands Record.— Morten Grove 🚢 (@mortenlund89) December 18, 2019
As if Monday with 672 (total updated)
wasn't enough 🚨
📈🇳🇱📈6 7 6📈🇳🇱📈
Tesla cars were registered in The Netherlands Tuesday 🤯🇳🇱🚘📈
MX 1@TroyTeslike @jpr007 @OwnersNl @PBRStreetGang7 @EVNewsDaily pic.twitter.com/x1urEC1Wu9
Meanwhile, in the Netherlands, Tesla’s Model 3 registrations reached a record-high of 676 per day. As of December 19, over 5,000 Model 3s have been registered for license plates in the Netherlands, which tenuously support claims that Tesla’s affordable luxury sedan was sold out in the EU for the remainder of the year.
On the other side of the world in China, MIC Model 3s are being transported to delivery centers all over the country. Chinese reservation holders have already received notifications informing them that a Tesla delivery specialist will be in contact imminently to complete the final requirements needed to deliver their MIC Model 3.
More and more Tesla Model 3 occupying parking lot in Shanghai, stay tuned for more update about Gigafactory 3 and MIC Model 3 hitting the roads in China 🇨🇳.#Tesla #TeslaChina #GF3 #MIC #Model3 #China #特斯拉 #中国 $TSLA pic.twitter.com/LpOC2JvvmJ— Jay in Shanghai 🇨🇳 (@JayinShanghai) December 19, 2019
Before closing at US$393.15, TSLA stock briefly touched US$395.22, closing in on the US$400 price target set by Jefferies in early November. Philippe Houchois, an analyst for Jeffries, raised TSLA's PT by 15 percent back in November from US$300 to US$400. Jefferies raised its price target for Tesla because it believed the all-electric car company had the potential to earn more in 2020 and would improve its balance sheet as well.
Earlier this month, Morgan Stanley also raised its bull case for Tesla from US$400 to US$500 because of Elon Musk’s Cybertruck and Gigafactory 3’s estimated production volume. Morgan Stanley seemed a bit more optimistic about the growth of TSLA shares than Jefferies, however, the investment firm still holds a bear case of US$10 for the automaker.
Again, I am totally agnostic and this is a total educated guess, but if $TSLA rallied to new high's and hit the $390's for the first time I would assume we would see quite a bit of short covering as shorts would be down another -$1.5 billion in mark-to market losses. https://t.co/AOo0BcHUzQ— Ihor Dusaniwsky (@ihors3) November 7, 2019
Morgan Stanley maintains a price target of US$250 on Tesla stocks because it believes that the non-traditional automaker will start behaving like standard car manufacturers once Gigafactory 4 in Brandenburg is operational. However, based on the massive demand for the Model 3—as seen by the deliveries being made worldwide—and the latest rally in TSLA stocks, the automaker may have reached safer waters.
According to Ihor Dusaniwsky, the Managing Director of Predictive Analytics for S3 Partners LLC, most shorts will cover if TSLA shares rallied above US$390. With a possible exodus of shorts, Tesla can focus on its future plans with Gigafactory 3 in China, Gigafactory 4 in Germany, Model Y production, and Cybertruck production as well. The automaker will need to fully concentrate on its upcoming projects to reach at least Morgan Stanley’s bull price target within the next year or so.
Featured Image Credit: Alvin Foo