GM IPO Driving Short Interest in Tesla

Tesla Motors (TSLA) is by far the most shorted stock in the Russell 1000 at 64% of its public float sold short. This is incredibly high. The next highest are half this level. The chart below from Bespoke speaks loudly. What gives?

Tesla appears to have run up in the wake of the GM IPO and its hyped car, the Chevy Volt. Tesla even popped above $30, getting back to where it peaked after its IPO. The shorts are betting this is short-lived.

GM offering priced today at the top of its range, which had been revised upwards. Much of the excitement surrounds the Volt, which is winning car of the year awards. I find the Volt to be the most interesting car in the world right now.

The last time a big IPO like this came out to such accolades, it marked the 2007 top. The cheeky site ZeroHedge ran a poll and found 35% expected the IPO to trade below its offer price within 24 hours. Another 35% thought it would take no longer than a week. The WSJ also ran a poll, and 56% thought it would be below within three months.

I hope the Volt proves them all wrong … but the offering seems over-hyped. Never forget your are buying a stock, not a company, nor a car!

About Duncan Davidson 228 Articles

Affiliation: NetService Ventures

Duncan is an advisor to NetService Ventures, where he focuses on digital media and the mobile Internet.

Previously he was at four start-ups: Xumii, a mobile social service based on a Social Addressbook; SkyPilot Networks, the performance leader of wireless mesh systems for last-mile access, where he was the founding CEO; Covad Communications (Amex: DVW, $9B market cap at the peak), the leading independent DSL access provider, where he was the founding Chairman; InterTrust Technologies ($9B market cap at the peak), the pioneer in digital rights management technologies, now owned by Sony and Philips, where he was SVP Business Development and the pitchman for the IPO.

Before these ventures, Duncan was a partner at Cambridge Venture Partners, an early-stage venture firm, and managing partner of Gemini McKenna, a joint venture between Regis McKenna's marketing firm and Gemini Consulting, the global management consulting arm of Cap Gemini.

He serves on the board or is an adviser to Aggregate Knowledge (content discovery), Livescribe (digital pen), AllVoices (citizen journalism), Xumii (mobile social addressbook), Verismo (Internet settop box), and Widevine (DRM for IPTV).

Visit: Duncan Davidson's Blogs

3 Comments on GM IPO Driving Short Interest in Tesla

  1. there is nothing new about the volt, its a hybrid, it has a gas engine that drives the wheels above a certain speed when the battery dies (which it obviously will to early) so this is nothing new, same old bunk from gm
    they should and will go under again. Gm is driving the short interest in GM and i cant wait to see that reading in a few days or..minutes. GM=Junk, Old white men are getting rich off the taxpayer as we speak, all over again.


    • Bob,

      If you haven’t spent the 2 minutes it takes on the Internet to learn the difference between an EREV and a hybrid you should probably keep your opinions to yourself. The fact is the gas engine isn’t even connected to the drivetrain in the Volt.

      • While I agree with your sentiment, that Bob is way off base, you aren’t dead-on either.

        The ICE is connected to the drive-train, powering the front wheels at highway speeds, during low battery or up-hill driving conditions. This is actually a smart thing on GM’s part, since this is when ICEs are most efficient – more efficient than pure EV.

        The Volt is the best tech out there – negating the range issues of pure EVs, but still moving the whole industry forward. It’s a shame that the cost is twice a normal car, but we always pay to be on the cutting edge.


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