The auto-maker plans to launch its Model 3 on March 31; investors and analysts are quite excited about the event.
Analysts and investors have been long concerned with the long-term future of the auto-maker giant, Tesla Motors Inc. As March 31, 2016 is approaching the analysts and shareholders are getting excited as the most anticipated event by Tesla will be held at Hawthorne Studios where the automobile manufacturer will be introducing its Model 3 electric vehicle (EV). This event is considered to make or break the EV maker; however many are expecting that Tesla Motors will be able to gain back the trust of its analysts with the introduction of the latest vehicle.
In case the latest model by the auto-maker turns out to be a hit, which many are predicting it will be, the short sellers of the stock will be in for a tough time. Tesla Stock is expected to witness a big jump in its share price if the event works in favor of it. As per the latest data by Bloomberg, the company short interest stands at an all-time high of 34.05 million shares for the period that ended in February.
It seems that the stock price is bound to get up since there are a high number of shares in the short position and along with the big event coming up, the share price is certain to bounce. This ultimately signifies that the stock price will not just vault due to the event or the release of Model 3 but also because of the short squeeze – this short interest is equivalent to over 34.76% of the outstanding share in the company; making the stock highly expensive.
If the stock of the automobile giant continues to rise, more investors with short position are expected to borrow the stock which will lead to a rise in stock prices. Tesla Stock had been underperforming since the beginning of the year however it managed to bounce back after February 10 after announcing its fourth quarter financial results. Even since the announcement, the stock of the auto-maker has jumped by as much as 57% which blew up in the fact of those Wall Street analysts that had a bearish stance towards it.
Due to the lag in production and less deliveries of Model X, investors became quite confused with the performance of the company. It managed to sell 208 units of Model X which was lower than the company’s and analyst’s estimation. Because of the slow production of the electric crossover sports utility vehicle the stock price was affected. However, the CEO Elon Musk admitted that they made will making the vehicle and stated that they simply put too much technology and features into one vehicle.
As the event approaches, teaser picture of the latest car have started to surface. The company and its executive officer have chosen Twitter as the perfect platform to share these images, to create the necessary hype for the electric car in the market. For the first time, the organization is relying on Buzz Marketing as previously word of mouth strategy worked best for the giant. Furthermore, as per the report, Tesla has sent of 650 invites of the event to its customers.
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