All I Learned In 2020 Was It’s Best Not To Bet Against Tesla Stock

All Tesla (NASDAQ:TSLA) did last year was surge, oh, 700% and finally find its way into the S&P 500. Accounting for that performance and the loss of the S&P 500 tailwind, it’d be easy to assume TSLA stock won’t repeat its 2020 showing this year.

That doesn’t mean the electric vehicle (EV) producer won’t continue delivering for investors. Nor does it mean investors should waste their hard-earned capital by wagering against Elon Musk’s company.

Indeed, it’s rather easy to find talk of an EV equity bubble with some of that chatter revolving around Tesla. Yes, there are dubious companies in this space, plenty of which aren’t yet delivering or may never bring a vehicle to market. But Tesla is an established leader with a track record of burning those that bet against it.

One of the most interesting facts from the past year, particularly for those holding TSLA stock, is that, as of Dec. 22, 2020, short sellers had lost $39 billion betting against the EV maker shares. Bears lost more than six times as much shorting Tesla last year than they did doing the same with Apple (NASDAQ:AAPL).

To further put that $39 billion into context, short sellers nearly lost an Electronic Arts (NASDAQ:EA) going against Tesla last year. There’s still more than $30 billion worth of short interest in Tesla and the stock made its way above $700 just two trading days into 2021. Fortunately, for those long the name, Tesla doesn’t need short covering to continue moving higher.

TSLA Stock: Analysts Still in Love

At the prices at which it hawks its wares, Tesla is a luxury vehicle maker, which narrow its pool of potential buyers. That’s by design. Musk has set his company up as an aspirational brand on par with a BMW or Lexus and data confirm car buyers are taking the bait. In line with guidance, Tesla delivered 500,000 vehicles last year with 180,570 delivered in the fourth quarter.

“Our 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. Final numbers could vary by up to 0.5% or more,” according to the company.

One year of solid deliveries is just a year, but it shows Tesla’s technology and process are working, explaining why so many on Wall Street are coming around on the stock despite frothy valuations:

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