There’s no question that 2017 will be a critical year for Tesla Motors Inc (NASDAQ: TSLA). The company and its shareholders are making a huge bet that the Model 3 can
transform a niche luxury electric car company into a dominant global
force in the automotive industry worthy of the stock’s $36.9 billion market cap.
Expectations are extremely high for the Model 3, which is still expected to begin shipping by the end of 2017. If Tesla delays
the Model 3 launch or delivers an over-priced or sub-par vehicle compared to 2017 Motor Trend Car of the Year, the General
Motors Company (NYSE: GM) Chevy Bolt, Tesla’s stock has
a long way to fall.
Short Sellers' Thought Process
At least that’s what Tesla short sellers are thinking. Tesla’s short interest has jumped 27.8 percent in the past year as
traders bet on the Model 3 not living up to the market’s sky-high expectations. However, the more the short sellers pile into the
stock, the more the Tesla stock battery becomes charged for what could be a major 2017 short
squeeze.
According to shortsqueeze.com, Tesla
currently has an extremely high short percent of float of 30.0 percent. The stock has more than 35.3 million shares held short with
8.7 days to cover.
With so much money on either side of the Model 3 bet, the stock seems poised to move hard one way or the other by the end of
2017. If the Model 3 lives up to the hype, that upward move could easily trigger a spectacular short squeeze event.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.