Tesla needs to raise capital, invest: Barron’s editor
Investment bank Piper Sandler raises the Tesla price target from $729 to $928. Barron’s senior editor Jack Hough explains how Tesla can remain profitable.
Tesla short-sellers, hammered by a 60 percent run-up in the electric car manufacturer's stock price this year, finally caught a break this week. Not from a mistake by mercurial founder Elon Musk, but from a virulent coronavirus that has sent global markets into a swoon.
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Fears that the virus would wreak worldwide havoc after shutting down large swaths of business and personal activity in China, the world's second-largest economy, dragged major U.S. stock indexes into their steepest weekly plunges since the 2008 financial crisis, according to the Dow Jones Market Data Group.
The blue-chip Dow Jones Industrial Average tumbled from rarefied highs nearing 30,000 earlier this month to around 25,000, its level near the start of President Trump's second year in office, while the S&P 500 and tech-heavy Nasdaq Composite plunged 11.5 percent and 10.5 percent, respectively.
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Tesla, not on any of the three major indexes despite a market value of $123 billion, grappled with the worst week in its history, according to the Dow Jones group. The shares slid 26 percent to $667.99, paring gains that had cost short-sellers — traders betting the stock's value would decline — $1.13 billion in February alone, according to financial analytics firm S3 Partners.
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Those who had already begun covering their positions — buying shares to replace the ones they had borrowed and sold under the expectation that a decline would enable them to replace the shares more cheaply and pocket the difference — suffered an additional injury: They could have lost less money had they waited.
The number of shorted Tesla shares decreased 32 percent over the past month, however, according to S3.