After a surprise move higher following Tesla’s earnings release, investors betting against the electric-auto maker collectively lost more than $1.5 billion on Thursday, according to estimates data firm S3 Analytics.
Tesla rocketed higher after its better-than-expected earnings report, soaring 11.3% higher, and trading near $645 per share, during afternoon action. Tesla stock hit an intraday high of $650.88.
Several analysts raised their price targets on Tesla stock Thursday morning, adding to the existing momentum.
The American automotive and energy company based in Palo Alto, California reached a $100 billion market cap for the first time at the commencement of trading last week, readying CEO Elon Musk up for a massive payout.
Tesla’s stock climbed more than 7% last Wednesday, driving its market cap above $106 billion. Its market cap opened at $103.12 billion.
Tesla short sellers have now lost over $5.2 billion this year in mark-to-market losses after losing $2.89 billion in 2019, S3 said. Since the stock’s low of $178.97 on June 3, 2019, Tesla short sellers have covered 19.11 million shares, worth $11.1 billion, and have lost $12.43 billion in mark-to-market losses, according to S3′s Ihor Dusaniwsky.
“Shorts were trampled by a Tesla Semi as its stock price rose +9% within the first 5 minutes of trading and had little chance to close out positions at anywhere near yesterday’s closing price,” he said in a note. “Tesla’s short squeeze will probably shift into a higher gear as some short sellers re-evaluate their short thesis and begin to trim or close out their short exposure.”
Among analysts who raised their price targets, Canaccord Genuity analyst Jed Dorsheimer raised his target to 750, from 515, and maintained a buy rating.
“Critically, the company ended the quarter with $6.3 billion in cash and generated $1 billion of free cash flow in the quarter, which should finally put to rest any balance sheet concerns,” he wrote.
Wedbush analyst Daniel Ives raised his price target to 710, from 500, with a rating of neutral.
“Tesla delivered a potentially game-changing fourth quarter with strong profitability and healthy cash flow signaling what could be a new era for Elon Musk and (Tesla headquarters) Fremont going forward,” Ives wrote in a note to clients.
For ETF investors looking to play the electric car company, the ARK Industrial Innovation ETF (ARKQ) and the First Trust NASDAQ Global Auto Index Fund (CARZ) are two funds to consider.
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