Tesla Motors Inc (TSLA) Drives Higher Despite Model 3 Design Drama

Tesla Motors Inc (TSLA) is attempting to come back from its early May losses

by Alex Eppstein

Published on May 11, 2016 at 10:44 AM

Tesla Motors Inc (NASDAQ:TSLA) said the design of its upcoming Model 3 electric car has yet to be finalized, even though manufacturing is set to start within 18 months. Still, the automaker's stock is up 1.7% at $212.19, as it tries to turn around a recent downtrend. Month-to-date, the shares have lost nearly 12%, prompting options traders to bet bearishly.

Based on data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), options traders have bought to open 1.15 puts for each call over the last 10 days. The corresponding put/call volume ratio ranks just 7 percentage points from an annual peak. In other words, options speculators have been placing bearish bets over bullish at an accelerated clip.

They're hardly alone in their doubts. In fact, the majority of analysts rate TSLA a "hold" or worse -- though the tide may be starting to turn. Plus, 28.6% of the stock's float is sold short, or roughly 29 million shares -- with Jim Chanos among the higher-profile short sellers.

As alluded to, Tesla Motors Inc (NASDAQ:TSLA) has hit a recent rough patch, underperforming the broader S&P 500 Index (SPX) by 18 percentage points in the past month. Moreover, the stock will need to overcome resistance at its 80-day moving average if it hopes to recover from its recent slide. Historically speaking, that trendline proved to be a thorn in TSLA's side last November and December, eventually giving way to an early 2016 sell-off.

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