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Elon Musk’s Shorts-Sale Prank Briefly Crashes Tesla Site

Tesla Inc. (TSLA) CEO Elon Musk announced Sunday that Tesla is selling a pair of red shorts on its retail site- leading the site to briefly crash after the shorts sold out in minutes.

Musk announced the sale through Twitter in what was widely perceived as an attempt to highlight short-sellers of Tesla’s stock. Indeed, Tesla is by far the most shorted stock by valuation on the NASDAQ stock exchange. According to Tesla Daily, as of mid-June, more than 15 million shares of TSLA stock were being sold short.

The shorts sold for $69.420 and were uniquely priced to highlight the last 3 digits in reference to Musk’s 2018 tweet that he was taking the company private for $420 per share.

Musk reportedly sent Greenlight Capital (GLRE) founder and Tesla short-seller David Einhorn a pair of shorts along with an additional shipment to the SEC. This is not the first run-in between Musk and Einhorn. Last November, Musk published a letter addressing him as “Mr. Unicorn” and called out Greenlight’s losses while also inviting Einhorn to visit the company after the fund manager criticized Tesla’s lack of profitability.

On Thursday, the automaker reported second-quarter car deliveries that exceeded expectations with 90,650 vehicles compared to estimates of 74,130 vehicles. Tesla’s deliveries fell only 4.8% from the same quarter last year even as automakers like General Motors (GM), Fiat Chrysler (FCAU), Toyota Motor, and Ford reported a plunge in second-quarter sales as a result of the pandemic.

In an email to Tesla employees, Musk congratulated them saying, “Just amazing how well you executed, especially in such difficult times. I am so proud to work with you!”

Wedbush analyst Daniel Ives was enthusiastic about the Q2 results, saying on July 2, “Its Tesla’s world and everyone is paying rent.” Ives maintains a $1250 price target (5% downside potential) and also a Hold rating on the stock. He noted, “the lockdown easing in the US/Europe, and some potentially game-changing battery developments on the horizon, that Tesla’s stock likely has room to run further.”

Meanwhile Canaccord Genuity analyst Jonathan Dorsheimer said on Thursday, that he will review his rating and price target as result of the surprising Tesla vehicle delivery results. As of July 2, he still maintains a Hold rating and a price target of $650, which translates into 50% downside potential.

Tesla’s stock is up 189% year-to-date with a cautious Hold analyst consensus that breaks down into 7 Buy ratings versus 10 Hold ratings and 8 Sell ratings. The $849.56 average price target suggests 34% downside potential for the shares in the coming 12 months. (See Tesla’s stock analysis on TipRanks).

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