Did Tesla Run Out Of Gas Or Get Hit By A Mack Truck?

If you take a good look at the price chart of Tesla, the way you would take a good look at the Tesla Model S if you had one sitting in your driveway or garage, you would have to notice that while the car looks superb and like it wants to run at 200 miles an hour-lifting your spirits and heart rate, the price chart indicates something is terribly wrong and that it might be heading to $200 per share and give you cardiac arrest instead.

Don’t get me wrong, on both sides of the equation are equally happy and very unhappy Traders and investors. You see if you bought at the December lows of 2016 you are smiling from ear to ear and you might actually own a Tesla from your profits. However if you bought Tesla in the last 2 to 3 weeks, where shares saw a 52-week high of $386.99, you fall into the  latter category mentioned above.

If you are a short trader- one who sells shares first and buys them lower later(hopefully), then you are smiling all the way to the bank as shares are off around 20% from 52 week highs. Shares have traded in a 52-week range of $178.19 to $386.99. One reason why shares may have gone from such lows to such highs is what’s called the ‘short interest’ or ‘short float’.

This is the amount of shares that traders or investors have basically sold now looking to buy lower later. A  short float of 24%, which is what Tesla currently has, is a significant amount of shares short. This means roughly one out of every four shares have been sold now looking to be bought back lower at a later date.

A few reasons can be attributed to the recent price action. Number one, the market in general has been choppy and testing support levels for some of the high beta stocks. Aside from that, Tesla has had some company news that has not been the best they could have hoped for.

Some recent news surfaced that an independent highway safety organization made a claim that their Flagship Model S was unable to qualify for top safety standard levels. The latest shortcoming, which comes after changes were made following an initial failure earlier in the year, appears to discredit the company’s claim on its website that its vehicles are “the safest cars ever.”