"This has been quite the run," said Ihor Dusaniwsky, managing director for predictive analytics for S3 Partners. Many short-sellers will probably hold their positions hoping the stock will drop or slowly exit over time, he said. "It's going to take a while for this to shake out."
Musk's testy sparring online with notable short-sellers, including David Einhorn of Greenlight Capital, has become one of the fiercest rivalries in capital markets.
Greenlight Capital is a long-time detractor of the carmaker and in its annual letter to shareholders in January revealed that it holds a put option against Tesla. This type of option gains in value if the stock drops, but suffers muted losses compared with a typical short position if the share price rises.
Mark Spiegel, managing member of Stanphyl Capital, will maintain a short bet against Tesla despite the bumper run for the stock but has capped the position to 5 per cent of the portfolio. He points to lower revenue and profit for the second half of 2019 compared with the same period a year earlier as a signal the company's outlook was weaker than it appeared.
"The only things growing at this alleged hypergrowth company are increasingly profitless unit deliveries and the stock price," Spiegel said. Greater competition from established automakers in the electric vehicle segment would also pressure Tesla's stock price in the future, he added.
"The real electric car competition is just beginning. We're still short and will remain so," Spiegel said.
Toby Clothier, an analyst at Mirabaud Securities, said the US$105m fourth-quarter net profit should be considered a net loss in part because 7,000 cars sold in the quarter were made in the prior quarter, skewing the numbers. The company has also predicted a week-long delay to production from its Shanghai factory because of the coronavirus outbreak.
"If you look at the numbers closely there are things that are confusing," Clothier said.
"Tesla makes no money whatsoever and has quite high capital intensity."
Tesla did not immediately respond to a request for comment.
Written by: Richard Henderson
© Financial Times