Short-sellers found themselves in the quicksand anew Monday as Tesla's stocks soared nearly 20 percent, surpassing the $700 level for the first time after a host of upbeat feedback from analysts.
The percentage rally marks the biggest run since the middle of 2013, based on the Dow Jones Market Data Group monitoring and a new all-time peak.
Short-sellers -- or traders who wager against a company's stock in the hope that its price will plunge -- took a heavy blow with $2.47 billion in losses late Monday when stocks traded at $752, financial analytics agency S3 Partners revealed.
These bettors have now shed over $5.8 billion in total losses so far, this year. But the misery might not even be over yet as Wall Street experts see Tesla's stock nearing the $800 mark.
In a note, Ihor Dusanwisky, managing head of Predictive Analytics at S3 Partners, disclosed that most people these days are expecting a "dramatic stock short squeeze," for Tesla, but the tightening is more likely to be a steady and slow fall that is shorted rather than abruptly dropped.
Even after the quick surge, Wall Street said Tesla remains the market's most heavily-shorted stock, with a short interest of $15.86 billion, or 18.21 percent of the stocks ready to change hands.
The earnings reported late Monday came after a series of positive developments for company stocks in the last few days as market observers hiked their price goals and Panasonic disclosed that its battery joint venture with Tesla lifted its first quarterly sales.
In a memo sent to customers late Monday, Argus analyst Bill Selesky increased his price target from $556 to $808, citing steady sales momentum from Tesla's legacy Model S and Model X and solid demand figures for its new Model 3.
Analysts' positive perception assumes continued revenue climb and rising orders for these electric vehicle models, which accounted for over 80 percent of Tesla's total output for the final quarter of 2019.
Tesla projects over half a million vehicle shipments this year, sparked mainly by the acceleration in the assembly of its Model 3 in China. The Palo Alto, CA-based electric car giant also sees positive quarterly revenues this year, which will help the company "self-fund" its operations.
Despite recent setbacks in production, shortage in vehicle components, labor expenditure overruns, and other challenges, analysts expect Tesla to gain from its commanding presence in the electric vehicle business and boost its performance in the coming months.
