- Currently trading at around $350
- Tesla remains the most shorted stock in US
- Some analysts believe it could reach $500
When Tesla stocks kicked off last week at well below $300, few traders or investors would have believed that it would now be approaching $350. Since then, the company has surprised just about everyone by releasing better-than-expected results, causing its stock price to surge by more than 16%.
However, the automotive company is not out of the woods yet. If the stock market is able to continue its renewed momentum, a strong short squeeze might well be the start of a new bull run. This would effectively mean the bears throwing in the towel on the one stock they hate more than any other.
According to S3 Partners, Tesla is still the nation’s most shorted stock, with more than $11.7bn shorted.
StockWaves Lead Analyst Zachary Mannes said: “This could be the strong start to a swing in sentiment that will take Tesla up to $450. After another consolidation, $500 or higher is even possible.”
Based on the company’s present market capitalization, at a price of $500, a stock like Tesla would be worth nearly $85bn. Once that happens, $100bn would no longer seem out of reach.
Mannes is not a delusional bull trader by any stretch of the imagination. He said he has been studying Tesla’s stock price pattern for about 2.5 years and added that a rally such as the one suggested above might leave Tesla reaching new highs next year, and possibly declining significantly after that.
Nomura Senior Analyst Romit Shah said: “If Tesla can execute to plan, we believe that the narrative around bankruptcy risk will go away.” That, he believes, would reduce short interest and drive Tesla stocks higher.
He released his buy rating on Thursday and currently has a $450 price target on Tesla stocks.
