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A couple of interesting statistics about stocks that are easily available are related to how many people are shorting it (ie, someone borrows a share, sells it, and makes a profit if they can re-buy it at a later date to close the short position). In the case of TSLA the stock, as of Apr 15, almost 31 million shares were lent out to short sellers ("sold short"). That is out of 72 million shares on the market ("float"). At an average volume of 3 million shares traded per day (trailing 3 month average) it would take more that 10 trading days of nothing but short sellers buying shares on the open market to return to the people they borrowed them from ("cover"). Short trading unhedged is regarded as dangerous for this reason. If you buy a stock in the traditional way, if it goes to zero you only lose your investment. If you sell a share short, your losses (amount you have to re-buy it for minus the price you sold it for) is unbounded. Typically, this isn't collateralized by cash, but in money that brokers loan to traders ("margin"). If a broker sees that I have a really, really big loss on a short position, they might make me repay that money ("issue a margin call")... and depending on the situation, that might force a trader to cover their short position. Anyway, point is that this can lead to a bunch of short sellers driving up the price of a heavily short stock all at once because they've either decided to cut their losses or because of margin calls, called a "short squeeze". This usually isn't sustainable because it's a temporary supply/demand imbalance. Could be an tough day for a lot of people investing against Tesla tomorrow, but I wouldn't bet on the gains in TSLA the stock tomorrow/in after-hours trading lasting for a long time. |
Depends on the future performance of the company. Netflix experienced one of these short squeezes in January. Look at their 6 month chart.
http://finance.yahoo.com/echarts?s=NFLX+Interactive#symbol=n...;