Year-to-date gains: 353%
Float Short (as of 7/31): 32%
Elon Musk’s revolutionary electric car company Telsa (TSLA) is one of the most heavily shorted stocks in the U.S. market, and it’s not hard to see why. Can you name the last successful new car company, much less one that sells super-pricey vehicles for which there is still no established market?
Furthermore, Tesla trades for an eye-watering 90 times forward earnings. That’s another area of sticker shock when you consider the compound annual earnings growth forecast stands at just 19% a year for the next five years.
As of July 31, nearly a third of Telsa’s float — or 19.8 million shares — was sold short, up from 18.5 million shares in the prior month. And it has been a disastrous trade. Tesla’s stock is up more than 350% so far this year.