Is Tesla Motors the Next Apple?
Seems to be some stormy weather over in Shortville these days
— Elon Musk (@elonmusk) April 25, 2013
Elon Musk, CEO of Tesla Motors (NASDAQ:TSLA), has made himself infamous by vehemently defending his electric-vehicle venture against any and all critics. The Tweet above, published last week, is just one of the most-recent jabs at the nearly 50 percent short interest on the company’s stock. At the current trade volume, it would take about two weeks to cover.
Covering their position may be something Tesla shorts have been thinking about recently. The stock is up 55 percent this year to date, and up 95 percent over the past six months. Longs and curious observers have suggested with increasing frequency over the past few weeks that the stock could be setting up for a squeeze.
The squeeze would be interesting, and definitely worth any investors’ time to pay attention to, even if they do not have a position on the stock. It’s tautological, but what Tesla does over the near and mid-term will help define how it performs over the long term — an how it performs over the long term could have a tremendous impact on the electric-vehicle market.
The slides below, compiled by Longboard Asset Management, may be a bit dramatic, but the firm makes the case that Tesla could have the same sweeping impact in the automobile market that Apple (NASDAQ:AAPL) had in the technology market. (See slide 13 for their consideration of the short-squeeze thesis.)
Longboard argues that the “Tesla Model S is the equivalent to the global car industry what the iPhone was to the global mobile phone industry in 2007.” Additionally, that “consumer adoption of the Model S has been purely based on product design and performance not economic incentives.” (Emphasis is theirs.)
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