- Wolfe Research named Tesla (TSLA) the top stock to short on its latest “Short Hits” list, citing an 84% share price surge over the past year undercut by weakening sales and financials, with a 2.3% short interest.
- GameStop (GME) joins Tesla atop the list with an 8% short interest, its stock doubling despite eroding finances, boosted recently by speculation over a Bitcoin (BTC) move, alongside other picks like U.S. Steel (X) and Moderna (MRNA).
- Tesla’s low short interest signals untapped bearish potential compared to GameStop’s crowded trade, as Wolfe highlights a market where lofty gains mask vulnerabilities across these high-profile names.
Tesla (TSLA) finds itself in the crosshairs of Wolfe Research, which last week crowned the electric vehicle maker as the prime candidate for shorting among its latest “Short Hits” list of 16 stocks poised for a near-term price tumble. With an 84% surge in its share price over the past year, Tesla’s stock might dazzle at first glance, yet Wolfe points to a fraying financial fabric – deteriorating sales and fundamentals – that belies the rally, pegging its short interest at a modest 2.3% of float. This bearish spotlight contrasts sharply with Tesla’s reputation as an EV trailblazer, suggesting that beneath the hood of its $1.1 trillion market cap lies a vulnerability ripe for investors betting on a downturn.
Wolfe’s list doesn’t stop at Tesla; GameStop (GME) shares the top tier with an 8% short interest, its stock doubling over the same 12 months despite crumbling finances, fueled lately by buzz around a potential Bitcoin (BTC) plunge that’s piqued trader curiosity. The roster expands to include U.S. Steel (X), Moderna (MRNA), Alaska Air (ALK), and DraftKings (DKNG), each flagged for their own mix of lofty gains and shaky underpinnings, painting a picture of a market where exuberance might be outpacing reality. Tesla’s inclusion stands out, though—its low short interest hints at untapped bearish potential, unlike GameStop’s higher short float, which signals a more crowded trade already in play.
The electric vehicle giant’s paradox lies in its towering valuation against a backdrop of softening demand and profit margins, a tension Wolfe seizes on as Tesla navigates a crowded EV landscape and production hurdles. Meanwhile, GameStop’s crypto flirtation adds a speculative twist to its narrative, differing from Tesla’s more grounded, if strained, operational challenges. For investors, Wolfe’s call is a nudge to look beyond the hype—Tesla’s 2.3% short interest might understate the skepticism brewing, while the broader “Short Hits” lineup underscores a market ripe with overvalued bets waiting to unravel.
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