Tesla Short Interest Rises 1.7 Million Shares

By Douglas A. McIntyre Updated Jan 13, 3:07AM EST · Published Sep 27, 7:25AM EDT

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Tesla Short Interest Rises 1.7 Million Shares — © courtesy of Tesla Motors Inc.

Shares sold short in Tesla Motors Inc. (NASDAQ: TSLA) rose by 1.7 million to 27.9 million for the period that ended September 15. The number is a very high 25% of the float. These bets against the stock price are likely justified.

Tesla is losing a war on three fronts. The first is that the amount of competition from the world’s largest manufacturers in rising during a period when Tesla does not have its own manufacturing facilities that can pump out cars to keep up with demand. Its much anticipated Model 3, priced closer to a level many people can afford compared to Tesla’s earlier products, is not available. In the meantime, General Motors Co. (NYSE: GM) has launched its Chevy Bolt, which is considered a direct competitor. The electric car race is furious, to some extent because of Tesla’s early success.

Tesla is to takeover of Solar City Corp. (NASDAQ: SCTY), a company that many investors believe is overpriced based on its potential, and one that has only limited synergies with Tesla.

According to a Bloomberg report:

Elon Musk may have more work to do to convince his own shareholders to go along with the $2.6 billion proposed merger of Tesla Motors Inc. and SolarCity Corp.

Shares in both companies slumped after Musk — the largest individual shareholder in SolarCity — announced that Tesla had agreed to pay about $300 million less than initially proposed six weeks ago to acquire the rooftop solar installer. The revised terms come after criticism from Tesla investors and on the same day SolarCity lowered its forecast for 2016.

Musk, Tesla’s chairman, has said the combined company would become a clean-energy giant. He will have a couple of months to convince SolarCity shareholders to take the lower offer and will have to reassure Tesla investors that the company can afford to carry SolarCity while also coming up with billions of dollars to fund a slew of new vehicles.

Tesla’s shares are down 13% to $209 this year. It was once one of the hottest stocks traded on Nasdaq.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.