Executive Departure, Chanos Comments Pressure Tesla Stock

TSLA short interest is at a record high

by Patrick Martin

Published on Apr 26, 2018 at 9:58 AM

Tesla Inc (NASDAQ:TSLA) is down 0.6% to trade at $279, following news the company's autopilot chief Jim Keller left the company -- the most recent in a long line of executive departures for the electric automaker. A CNBC interview this morning with famous short seller Jim Chanos could also be weighing on the stock. Chanos reiterated his short position on Tesla -- which he noted has been in place for four years -- while citing a number of reasons for his bearish stance, including the recent mass exodus of executives and increased competition from established automakers like Porsche.

TSLA stock has shed 10% in 2018 already, and fell to an annual low of $244.59 on April 2. The shares have been guided lower by their descending 30-day moving average throughout April, with Model 3 production issues only adding to the woes. Of course, the increased attention from short sellers could also be hurting, as the number of shorted Tesla shares surged almost 35% in the past two reporting periods to the highest point on record.

Options traders have seemingly been bearish, too. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows TSLA with a 10-day put/call volume ratio of 1.08, a ratio that ranks 3 percentage points from a 52-week high. This means put buying has actually been more popular than call buying during the past two weeks, which is quite rare.

Digging deeper, the May 275 put saw a notable increase in open interest during that time frame. According to data from the major options exchanges, a majority of the activity at this strike has been of the buy-to-open kind, so many have been speculating on more losses for the equity in the weeks ahead. Tesla will step into the earnings confessional after the close next Wednesday.

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