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!