People really need to forget about the shorts and just worry about how Tesla the company is doing. I hope most are investing based on objective reasoning rather than some vindictive crusade. Dreaming about how to trigger the next short squeeze is short term piker mentality. SCTY had a massive short squeeze after ITC extension. Guess what, now it is trading far below where it was originally. Here's a secret(not a secret), if TSLA does what it is suppose to do, or what it says it will do, the short interest will take care of itself. If TSLA continues to miss earnings estimates by $1.00, the shorts will never go away and ride it all the way down.
Think of it this way. If every single short covered on this recent decline - no more short squeeze in the cards, would TSLA ever reach 300 and above? If the answer is no, that no longs were ever going to be willing to pay that price, then even if it got there on a short squeeze it would have been temporary. And it would have fallen back once the shorts were done covering with no one left to support the price. So what good is that unless you are a piker and sell? However, if the answer is yes, then one way or another TSLA will get there eventually. With or without shorts covering. It is simple, in the long run the stock will be priced based on the value the company produces, not based on some enduring battle between good longs vs evil shorts. Please.
One more thing about short interest that I am not sure many are aware of - it is not some bullish sign. Yes, high short interest represents volatility and a potential for sharp short term squeezes. But in the long run, for the vast majority of cases, high short interest(>20%) is indicative of either something wrong with the company or high inherent risk. Indeed shorts are a more sophisticated breed of investor than the vast majority of retail longs, which is why most of the time they are right. TSLA is not unique in its high short interest and there are a bevy of examples in recent years. GMCR, DDD, NUS, GPRO, FIT, GRPN, CHK, JCP and yes, SCTY. Just a few names everyone knows out of many more where the shorts have gotten it right. Even NFLX where the shorts were wrong, it had drawdowns of 80%+ before it was all said and done.
In TSLA's case, I believe the short interest is representative of the risk inherent in the company. In fact, for its market cap, there are very few companies who are less established and more risky. I know some will take issue with that and tell you(or have been telling you) that TSLA is the safest bet out there. Those people might have also told you it will never go below 200. On the other hand, there are also very few companies of TSLA's market cap who have the potential to grow into hundreds of $billions if things go right. It is that dichotomy of risk vs reward that reflects TSLA's reality. Not purely reward or purely risk that some will lead you to believe.
And yes I have read Seeking Alpha and seen the level of discourse on that site. If you really believe they are representative of the 30 Million shares short, or $6 Billion, it would be grossly naive. The vast majority of negativity posted on internet forums about Tesla is not from shorts. It is from idiots. Shorts owning millions of shares and billions of dollars do not post on message boards. To equate their motivation and reasoning with those of idiots would be a mistake and underestimation.
