We've been posting on Tesla since before the June 2010 $17 IPO.
Here's one from April Fools Day 2013: "Why We Don't Short Tesla: The stock is up 16% On The Day (TSLA)".
In a nutshell the stock doesn't go down as one would think it should, a behavior that was especially apparent over the last 10 or so days. with very negative press you wouldn't have been surprised by a $60 decline, yet it didn't happen.
Additionally, the stock no longer shows up on the 'Difficult to Locate' list and the cost to borrow is down substantially from the 2% per week we've seen in the past. It is still expensive to borrow but much less so.
Although I have an aversion to paying a cash cost for the chance at a theoretical profit there is information embedded in the cost-to-borrow:
"The Shorting Premium and Asset Pricing Anomalies".
Here is a two line summary of the paper:
1. The cheap-minus-expensive-to-short (CME) portfolio of stocks has an average monthly gross return of 1.45%, a 0.92% net return, and a 1.55% four-factor alphaHT: Victor Niederhofer's Daily Speculations:
2. Top decile stocks by shorting premium (cheap to short) returned an average of 0.75% (gross) and 0.11 % (net) in the next one month, while bottom decile (expensive to short) returned -0.71% (gross) and -0.17% (net).
Shorting Fees Are Inversely Proportional to Forward Returns? from Kora Reddy
Declining fees not a positive indicator for short sellers
Then there was August 2016
...For the longest time we had a Don't Short Tesla policy because it showed signs of being a cult stock and cult stocks can kill shorts. Plus it can be very hard to locate stock and very expensive to borrow when you do,
Here's another post, this time from one year ago:
June 2017
"Einhorn Compares GM to Apple and Explains Why He’s Short Tesla" (TSLA; GM)
...It is just so dangerous to put valuation (as compared to fraud) shorts on in a bull market.We're now at four violations of the rule and still profitable but it is a dangerous little game.
We have had a general rule, "Don't short Tesla" virtually since the IPO, that we've violated on three occasions, fortunately profitable but it is tough to tell if it was worth the risk.
Finally, don't be this guy (no, seriously, don't be this guy):
