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I would guess a mix of the positive jobs report and short covering from margin calls is at fault. Right-leaning investors have seemed to want the company to fai

I would guess a mix of the positive jobs report and short covering from margin calls is at fault. Right-leaning investors have seemed to want the company to fail for months, but Tesla is looking resilient with their good backlog and a strong economy. They're paying back their DOE loan early.

tocomment 14y ago
What do you mean by short covering from margin calls? What's causing the margin calls?
- mncolinlee 14y ago
  You can only "short" a stock by borrowing the shares using margin. (Put options are another way, but that is actually a side bet, not the same as short selling.) If you exceed the margin requirements because the stock price rises i.e. you owe more than you have capital and credit on hand, your brokerage may force you to "cover" or buy the underlying stock at the current market price. They do this to "call in" your debt to them. This is referred to as a "margin call." When a lot of short margin calls happen all at once, this is called a "short squeeze" because it squeezes more short sellers into covering by buying the stock at the current market price, which in turn causes the price to rise and squeeze other investors. In the case of Tesla, the stock is not very liquid. At the current volume, it would take thirty days for all short investors to find enough shares to cover their debts. This means a short squeeze can result in dramatic hikes in the stock price and even small hikes in the price can amplify short seller losses.
brc 14y ago
>Right-leaning investors have seemed to want the company to fail for months, but Tesla is looking resilient with their good backlog and a strong economy. They're paying back their DOE loan early. Seriously? You think people are prepared to lose money to make a political point?
- erikpukinskis 14y ago
  It's not a political point. They actually believe Tesla will fail. They want it to fail because it's fun seeing your predictions come true. Folks' politics and their beliefs about the world are all tied up together.
- mncolinlee 14y ago
  Erik answered right. It's not to make a political point. It's their entire worldview. The problem is just insular thinking within that political movement that electric cars are toys that are doomed to fail. Also, A123 and Ener1 battery makers failed, so they refuse to see that some companies are succeeding. The trouble is that they "eat their own dog food." Even Mitt Romney claims to believe it, but Texas Governor Rick Perry drives a Volt. When I mention that Volts are outselling the original Prius by over 2-to-1, conservatives argue that it's purely government buyers who are forced to buy them by President Obama. Try explaining to Romney backers that the backlog on the Tesla Model S is in the billions and that their candidate is wrong about the company.

tocomment 14y ago

What do you mean by short covering from margin calls? What's causing the margin calls?

mncolinlee 14y ago
You can only "short" a stock by borrowing the shares using margin. (Put options are another way, but that is actually a side bet, not the same as short selling.) If you exceed the margin requirements because the stock price rises i.e. you owe more than you have capital and credit on hand, your brokerage may force you to "cover" or buy the underlying stock at the current market price. They do this to "call in" your debt to them. This is referred to as a "margin call." When a lot of short margin calls happen all at once, this is called a "short squeeze" because it squeezes more short sellers into covering by buying the stock at the current market price, which in turn causes the price to rise and squeeze other investors. In the case of Tesla, the stock is not very liquid. At the current volume, it would take thirty days for all short investors to find enough shares to cover their debts. This means a short squeeze can result in dramatic hikes in the stock price and even small hikes in the price can amplify short seller losses.

brc 14y ago

>Right-leaning investors have seemed to want the company to fail for months, but Tesla is looking resilient with their good backlog and a strong economy. They're paying back their DOE loan early. Seriously? You think people are prepared to lose money to make a political point?

erikpukinskis 14y ago
It's not a political point. They actually believe Tesla will fail. They want it to fail because it's fun seeing your predictions come true. Folks' politics and their beliefs about the world are all tied up together.
mncolinlee 14y ago
Erik answered right. It's not to make a political point. It's their entire worldview. The problem is just insular thinking within that political movement that electric cars are toys that are doomed to fail. Also, A123 and Ener1 battery makers failed, so they refuse to see that some companies are succeeding. The trouble is that they "eat their own dog food." Even Mitt Romney claims to believe it, but Texas Governor Rick Perry drives a Volt. When I mention that Volts are outselling the original Prius by over 2-to-1, conservatives argue that it's purely government buyers who are forced to buy them by President Obama. Try explaining to Romney backers that the backlog on the Tesla Model S is in the billions and that their candidate is wrong about the company.