THE IMPROBABLE BUT fascinating story of the electric car company founded by Elon Musk has become a Wall Street battleground. Tesla went public in 2010, and its shares have skyrocketed to more than $300 per share since then. But it is still swimming in red ink. Losses have totaled $3.7 billion, and it is expected to have burned through more than $10 billion in cash by the end of the year. Small wonder everyone who’s anyone in Wall Street’s small and clubby world of short sellers has been short Tesla at one point or another
Looking at the balance sheet, Tesla is the perfect short. But its pioneering status in an industry facing wrenching technological upheaval, and its charismatic CEO, has won it legions of admirers. Sure, Tesla’s lofty stock price makes it a risky buy—but also a perilous short.
“It was the worst short I’ve ever had,” says Whitney Tilson, managing partner of Kase Capital Management, who was short Tesla, between 2013 and 2014, when the stock went from $35 to $205.
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