Tesla Stock Jumps, But Should Be Wary of This Number

Tesla StockIt’s Not All Rainbows for Tesla Stock 

Tesla Motors Inc’s (NASDAQ:TSLA) Tesla stock jumped three percent on Tuesday as oil prices rose and Alphabet Inc (NASDAQ:GOOGL)—commonly known as Google—reportedly “scaled back” self-driving car efforts, but short positions on the green tech company are reaching an all-time high.

With the race towards the self-driving car heating up, it was certainly a boon to Tesla stock to hear that Google has reduced its efforts in the competition. Of course, the story is that Google has not given up on self-driving software, but rather has decided to not construct a physical vehicle. The company is still planning to share its technology with other automakers, not dissimilar from news surrounding the Apple Inc. (NASDAQ:AAPL) car. (Source: “Here’s Why Shares of Tesla Are Soaring Today,” Fortune, December 13, 2016.)

The Organization of the Petroleum Exporting Countries (OPEC) has also reported that there were big output cuts in November, which will drive the price of oil upward and push consumers towards electric cars. Tesla stock tends to fare well when oil is high, as one would expect. (Source: “Tesla’s stock (TSLA) surges while short interest reaches all-time high after SolarCity merger,” Electrek, December 13, 2016.)

But Tesla stock’s rise is also interesting considering the amount of short positions being taken out against the company. The latest short interest position is reaching an all-time high with over 35 million shares of Tesla stock, according to a report released Friday for data as of November 30. (Source: Ibid.)

In the past, Elon Musk has described those who have taken short interest in Tesla stock as being “unwise” and in for a “tsunami of hurt.” And for the most part, he has been as good as his word. We’ll have to wait and see if 2017 will be more of the same for Musk and TSLA stock, or if all those betting against the tech giant are on to something.