David Jones, Chief Market Strategist of Capital.com:
We should know by now that the boss of the electric vehicle manufacturer Tesla is no ordinary CEO. Last week, its share price finished 11% higher as he mused on Twitter about taking the company private. This would mean taking it off the stock exchange at a price he said of $420 a share (Tesla started this week at $345 per share).
It has been known for some time that Tesla is the most-shorted stock on the US market. In a nutshell, this means that more investors are betting on a price drop in Tesla than on any other listed company. However, to provide some balance here, until recently Apple was one of the most shorted shares – and has recently become the world’s first $1 trillion dollar company. The short-sellers don’t always get it right.
What is interesting now for Tesla is what happens next? If the market thinks that this is merely Elon Musk venting his frustration at the amount of scrutiny his company – and its share price – comes under on a weekly basis, then investors may well take some of this week’s windfall profits, and the share price will be under pressure once more. As ever with Tesla and Mr. Musk, there is seldom a dull moment and it is likely to be even more closely tracked now than ever before.
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