Short sellers are setting their sights on Tesla.
Data compiled by S3 Partners shows short interest now makes up more than 35% of the float, or shares available to the public, and that it would take 8.23 days for shorts to cover those positions.
Traders have grown increasingly bearish on Tesla since the company missed its 2016 deliveries target. On January 3, Tesla announced its 2016 deliveries totaled 76,230, well below the 80,000 to 90,000 that Wall Street was expecting.
“Our Q4 delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct,” the company said in a statement at the time of the release in an effort to deflect criticism surrounding the shortfall.
Additionally, Tesla has been burning cash at a somewhat worrying rate. While the company managed to end 2016 with $1.2 billion of cash, it’s something that Wall Street continues to pay close attention to.
And while these worries have been swirling around Tesla’s stock, it has so far been able to shrug off those concerns. Shares have rallied nearly 20% so far in 2017, and are up more than 30% since Tesla closed on its acquisition of SolarCity. Tesla is trading within striking distance of its April 2016 peak near $265 a share.
S3 warns Tesla is setting up as a “potential squeeze candidate” if the stock keeps rallying into earnings, which are due on February 15.