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I don't mean to rub it in , those people who said to short Tesla a couple weeks ago were sure wrong. Last week Steve Eisman who rose to fame in 2008 by betting against the housing market, shorted Tesla. That position is probably at least 25% underwater now. Not only that, but Tesla losing money does not mean it is insolvent, because it can keep raising money and most of those losses are capital expenditures instead of operating losses.



While I don't necessarily disagree with your statement it is important to note when Eisman and others shorted the housing market before the 2008 collapse their positions also took big negative hits having to pay hundreds of millions to hold their short positions. Obviously in the end of the housing market collapse they made massive profits. Still very early in their TSLA position to determine the winners & losers.


If Tesla goes private, that is the end for the shorts - there is no "after" after that. Everyone who shorted will have to pay back their shares at $420 a share (or whatever the final price ends up being).


That if is a big if. Tesla is currently trading $40 under their supposed acquisition price. That's not exactly high confidence from the market that this deal will go through.


that is because nothing has been finalized. it can easily get there just based on market momentum. Tesla gained $70 in a week. another 40 is not that hard


Wall Street loves free money. The stock was trading at $360 before this proposal was announced, and only moved a third of the way to the purchase price on the news. That's not implying investor confidence that this will happen. Otherwise, plenty of people would be willing to load up on the stock on the assurance it would be bought at $420.


yes, not to mention it can still go to 420 without being bought out, by virtue of market momentum and a bidding war


sure, if tesla goes private


Their are insane. They have absolutely no leg to stand on.

Tesla has sustained enough Model 3 production that they produce positive cashflow and they will be profitable in Q3/Q4. As one large investor said, Tesla short term guidance has been pretty reliable.

Unless some massive macro event happens there is no way Tesla stock is gone fall back to prices where many of the shorts hold once they have proven the are able to mass produce cars.

Their reasons for the short positions are getting worse and worse. The main argument has been that Tesla is unable to produce Model 3 and will not have positive cash flow. Those arguments are all but dead in the water if you look at current sales numbers.


I'm not sure Tesla's public market story is over. It's somewhat absurd for a company to announce a plan that would require $40 billion in capital to be raised to finance it, and offer no details on where that is coming from.

Two, Tesla has large operating losses to go along to its CapEx and many shorts dislike how exactly their choosing to classify many of their expenses. Depending on how you look at their accounting, you can easily believe this company is completely structurally unprofitable.

The people who are betting against Tesla are not stupid.


The people who are betting against Tesla are not stupid.

Smart people lose money all the time:

victims of mt gox hack

enron

long term capital management

2000 dotocm crash

Bill ackman's herbalife short.

and and and on


> victims of mt gox hack

ok bro, I'm not sure we have the same definition of smart people if yours are people decided to buy a bunch of cryptocurrency and keep it all in a website built in php


one person I know, a physicist, said he lost 50 btc in the hack. in hindsight keeping the coins there was stupid but at the time it seemed safe


I go to physicists to learn about physics. I wouldn't ask them a question about finance.

I go to an economist, or maybe a trader, to learn about money and finances.


"The market can remain irrational longer than you can stay solvent" - keynes




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